Goodyear is adding a $300 million term loan to its $1.3 billion asset-based credit facility negotiated last year to enhance its cash position.
With the new secured loan arranged by JPMorgan Chase & Co. and Citigroup Inc., the credit facility totals $1.6 billion. The $1.3 billion facility, which matures in 2006, was part of a larger package negotiated last year to replace $2.94 billion in financing with $3.3 billion in credit facilities. The mostly secured debt, some of which matures in 2005, offered plants, property and assets such as trademarks as security.
The proceeds of the new loan can be used for general corporate purposes, Goodyear said.
According to Goodyear's 10-Q report, the tire maker had $2.98 billion outstanding on the $3.3 billion credit package as of Sept. 30. Also in the report, Goodyear said the $1.3 billion package could be increased to not more than $1.6 billion, a limit that the current credit line addition hits.
The consummation of the $300 million loan will be subject to some conditions, including the receipt of the consent of the lenders holding a majority of the commitments under that credit facility, Goodyear said.
The tire maker also will begin talks with lenders to amend the facilities to allow for future capital market transactions.
``These actions enhance our near-term liquidity and position us to access the capital markets as we gain traction in our turnaround plan during 2004,'' said Robert Keegan, chairman and CEO. ``I have a high level of confidence in our strategy and in the execution of our plan as we move forward.''