Joy Global, the new company name for Harnischfeger Industries, which has emerged from bankruptcy protection, has closed on a new $350 million four-and-a-half-year senior secured credit facility withDeutsche Bank. Kenneth Hiltz, senior v.p. and cfo of the Milwaukee, Wisconsin-based company, said the facility will be used to fund emergence costs from bankruptcy, to refinance the debtor-in-possession facility and for general corporate purposes.
"Deutsche Bank was selected as the lead after a competitive bidding process," said Hiltz. "A number of other banking services will be used. A lot of foreign exchange business, letters of credit and foreign banking abroad will be moved to Deutsche Bank," Hiltz added, explained. The ability to provide international flexibility was cited as the deciding factor in selecting the German bank when syndication launched (LMW, 5/28). The loan will be available in multiple currencies to facilitate business transactions in a variety of countries, including Australia, Canada and the U.K. Hiltz declined to comment on pricing, other banks in the syndicate or the banks that competed to lead the credit.
Heller Financial, Fleet Boston and CIT Group are part of the syndicate on the facility, which is priced at LIBOR plus 3% for the first six months, before switching to a grid based on total leverage. The credit will be secured against all the assets of the company, including receivables and intellectual property.
"The Harnischfeger name had a reputation to it," Hiltz noted, commenting on the decision to re-emerge as Joy Global. The track record in the financial markets of the Joy side of the business, which focused on mining equipment, is excellent, he added, and the aim is to re-establish a relationship with the investment community. The cash-draining paper business, which was not core to the company has been disposed of, he noted.