Gehl gets breathing room

Manitou's US subsidiary Gehl reached agreement with bank creditors on 16 April to withdraw the notice of debt repayment delivered on 31 March. That notice threatened to push the company into bancruptcy.

The agreement, called a forebearance agreement, allows Gehl continued access to its US$117 million credit line, its principal source of funds. The agreement also provides a 75-day period to complete the negotiation of another amendment to the credit agreement.

Gehl said it has repaid some of outstanding borrowings from cash generated from operations. It plans additional repayments in 2009 and also will seek a long-term, secured credit facility to replace the revolving credit agreement.

Meanwhile, Manitou said its sales for the first quarter of 2009 had fallen 46.2% to €192.1 million compared to the same period in 2008. Sales in France fell by 50.4% to €70.5 million, and in other European Union countries revenues declined by 54.8% to €75.3 million.

Sales outside the EU were down just 5.1% to €46.3 million, although this included a €14.2 million contribution from Gehl in the US. Manitou reiterated its forecast of a total 40% fall in sales for 2009.