DOW JONES NEWSWIRES
Terex Corp. (TEX) announced plans to repurchase up to $600
million of debt as it reached a deal with creditors allowing it to
do so.
The construction-machinery maker also said it will prepay about
$270 million of loans under the credit facility with a portion of
the proceeds from the sale of its mining business.
Other proceeds from that sale will go to pay face value for up
to $300 million each of 7 3/8% notes due 2014 and 10 7/8% notes due
2016. The company didn't say how much of the debt is outstanding
and a spokesman wasn't immediately available for comment.
Terex, which makes hydraulic excavators and tower cranes, sold
its mining unit to Bucyrus International Inc. (BUCY) in February
for $1 billion plus stock. If that money isn't used by early next
year to purchase businesses, Terex's lenders have requested it go
toward debt reduction.
The company said the new amendment removes the previous $200
million annual limitation on acquisitions and offers added
flexibility in other restrictive covenants.
Last month, President and Chief Operating Officer Thomas Riordan
said Terex is looking to buy public or private companies with
annual sales between $500 million and $1 billion that don't depend
on rental firms for distribution. Unlike most of its competitors,
Terex lacks a network of independent retail dealers to buy and
distribute its equipment. Instead, it sells most of its machinery
to equipment-rental companies.
In July, the company reported its second-quarter loss narrowed
as it benefited from improved order activity across most product
categories, although its cranes business continued to suffer.
Shares recently traded at $24, up 4.4%, amid a general market
rally. The stock is up 21% this year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com