ArvinMeritor Inc. (ARM) has completed a $180 million sale of its
wheel-manufacturing units to Brazilian railroad-equipment
manufacturer Iochpe-Maxion SA (MYPK3.BR), saying it would use the
proceeds to pay down its revolving credit facility.
The auto-parts supplier initially announced the sale last month,
when the company reported it swung to a fiscal third-quarter loss
amid weak auto-production volume. However, core results topped
expectations at the time.
ArvinMeritor has been working to remain in compliance with its
year-end credit line financial covenant. Last month, it reduced
usage of the revolver by $145 million. And on Monday, ArvinMeritor
said it would use the net proceeds of $169 million from the sale to
reduce outstanding balances on the revolver.
ArvinMeritor maintained it expects to remain in compliance with
its financial covenant in the fourth quarter.
The wheels business operates manufacturing facilities in
Limeira, Brazil, and San Luis Potosi, Mexico.
Shares were up 1.2% to $8.21 in after-hours trading. The stock
has surged in recent months from its all-time low of 32 cents in
March.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com