WAUKESHA, Wis., May 21 -- Generac Holdings Inc., a designer and manufacturer of generators and other engine powered products, announced today that it was adjusting its previously disclosed recapitalization plan in light of recent financing market conditions.
The
Company has now determined that it will decrease the total size of its
previously announced $1.2 billion financing and will not proceed with its
private offering of unsecured notes. The Company instead expects to increase
the amount of new senior secured debt to approximately $900 million.
If
incurred, the Company will use the proceeds of this new debt financing together
with cash on its balance sheet to refinance its existing senior secured credit
facility and to pay a special cash dividend of up to $6.00 per share on its
common stock. The Company still expects to replace its current $150 million
unfunded revolving credit facility with a similar sized asset-based revolving
line.
"We
believe this revised transaction structure is a disciplined approach towards
creating long-term shareholder value and represents an attractive return of
capital to shareholders," said Aaron Jagdfeld, President and Chief
Executive Officer. "Given our track record of strong free cash flow
generation, we are confident this new capital structure will allow us to
further invest in our organic growth initiatives and will provide the
flexibility for potential acquisitions in the future."
The
declaration of the special cash dividend remains subject to market and other
conditions, and will not occur unless the new senior secured credit facility is
finalized on acceptable terms. Assuming that this financing is obtained, the
Company expects its Board of Directors to declare and the Company to pay the
special dividend by or shortly after the end of the second quarter of 2012.
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