AKRON (March 5, 2003) — Goodyear was granted another extension—until April 4—by its lenders to comply with certain covenants of loan agreements, giving the Akron-based tire maker more time to finish discussions with its banks.
Goodyear previously had until March 7 to continue talks with its lenders. Under the extensions, Goodyear was freed from the covenants, which included contributions to the company pension plan above the federal government's requirements and the maintenance of a minimum net worth.
A Goodyear spokesman said talks with lenders will continue as the tire maker tries to restructure, refinance and extend its loan agreements until 2005. As of the third quarter, the tire maker had long-term debt of $2.9 billion that was coming due in intervals during 2003, 2004 and 2005, the spokesman said.
The tire maker also has secured a commitment from JPMorgan and Citigroup to underwrite a new, three-year $1.3 billion asset-based credit facility. That loan would take effect when the talks with lenders are complete.
“The new asset-based facility, which extends into 2006, provides additional liquidity that offers financial and operational flexibility for our businesses,” said Robert W. Tieken, Goodyear executive vice president and chief financial officer.
Goodyear also will release its 2002 financial results when the talks are complete. The Securities and Exchange Commission requires companies to file their fourth-quarter results by March 31, unless an extension is granted until April 15. The spokesman said Goodyear will consider the extension depending on the progress of talks this month.
As of mid-morning today, Goodyear's stock was trading at about $4.18 per share.