Xerium Technologies Inc, a leading global manufacturer of clothing and roll covers used primarily in the paper production process, announced that it has secured an amendment to its existing senior credit facility and entered into an agreement with certain shareholders with respect to the Company's contemplated dividend reinvestment plan.
The amendment to the credit facility includes the following changes:
A loosening of the interest coverage ratio covenant from the fourth quarter of 2006 through 2012 and the leverage ratio covenant from 2007 through 2012.
Changes to the pre-dividend free cash flow test to limit the amount of quarterly dividends that Xerium may pay in 2007 to 11.25 percent of pre-dividend free cash flow (as defined in the senior credit facility) for the preceding four quarters and to clarify that commencing December 31, 2007 the test limits the amount of quarterly dividends that Xerium may pay to 18.75 percent of pre-dividend free cash flow for the preceding four quarters.
Dividends reinvested in newly issued or treasury shares of common stock of the Company under a dividend reinvestment plan will not be treated as dividends for the purpose of the pre-dividend free cash flow test and will not reduce excess cash for the purposes of the senior credit facility.
The amount to which the balance on the Company's revolving credit facility must be reduced to for 30 consecutive days, during each year, is increased from zero to $20 million.
marketing@alchempro.com
