American Axle And Manufacturing Up 17%
AMER AXLE&MFG HLDS (NYSE: AXL) shares are up 17.4% on news of a cash infusion from General Motors (GM.UL). The parts maker had been struggling and many investors were concerned about the future if the company did not receive fresh capital.
In the last two trading days, the company's shares have posted a 118% gain as investors seemed buoyed by GM's decision to infuse AXL with $210 million of fresh funds.
AXL is attempting to restructure its debt in a plan to remain solvent and to once again become competitive. Judging from investor enthusiasm, many people feel this plan is viable.
The deal is structured so that AXL will get $110 million for costs associated with GM’s bankruptcy and then General Motors (GM.UL) will give AXL a second-lien term-loan facility for up to an additional $100 million. The parts maker can draw from this commitment through Sept. 30, 2013. The loan will mature on Dec. 31, 2013. The loan can be repaid at par any time prior to maturity.
Courtesy: WSE
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