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Federal-Mogul to Pursue Credit Pact Amendment/Equity Offering; to Issue $150M in Stock to Icahn Enterprises

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Federal-Mogul Corporation (NASDAQ: FDML) today announced that it has engaged J.P. Morgan Securities LLC and Wells Fargo Capital Finance, LLC to arrange certain amendments to its existing credit facility pursuant to which the Company's asset based revolving loan facility would be increased and its maturity extended from 2013 to 2017. JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association have each agreed to commit $125 million to the new revolving facility, subject to certain conditions. In addition, the Company is seeking to extend the maturity of approximately $1.8 billion of term loans outstanding under the credit facility from 2014 to 2016, and certain other modifications to the facility would be effected. To facilitate this refinancing effort, the Company has entered into an Investment Agreement pursuant to which it will issue approximately $150 million of common stock to a subsidiary of Icahn Enterprises L.P., the Company's largest stockholder of record, in a private placement exempt from registration under the Securities Act of 1933. In addition, the Company has also agreed to commence a subsequent rights offering of $150 million to shareholders of record. Icahn Enterprises has agreed to backstop the rights offering. The refinancing plan is conditioned upon a voluntary prepayment by the Company of up to $300 million of the extended term loans. The equity investment and existing cash balances will be used to fund such prepayment. The refinancing plan and private placement are expected to be consummated in the fourth quarter of 2012.

These refinancing transactions are subject to various conditions. No assurances can be given that the transactions will be completed on the terms set forth herein or at all.

Posted-In: News Offerings


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