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New Grede Foundry Secures Credit

Newly created Grede Holdings LLC, Novi, Mich., has secured up to $60 million in credit to do business as it completes the merger of two companies, one of which filed for bankruptcy in late June 2009.

Grede Holdings is the current iteration of the combined businesses of Grede Foundries Inc. and Citation Corp., which announced their merger at the end of 2009. The two companies completed the combination of their assets in early 2010.

The new entity announced that on Feb. 5 it had entered into a revolving credit and security agreement with Bank of America. Wells Fargo Capital Finance, part of Wells Fargo & Co., was named as a co-lender on the transaction. According to a Grede press release, the agreement provides up to $60 million over a term of three years to support the company’s working capital needs and other general corporate purposes.

“Given the restrictive credit markets of today, the new financing agreement validates Grede’s actions as further evidence of the company’s future vitality,” said Lou Lavorata, Grede’s chief financial officer. “Through our rigorous turnaround activities, we have brought together two well-positioned companies that have outstanding synergies, a strong balance sheet, low debt, and excellent support from our bank partners.”

The new Grede is a privately-held company making ferrous castings for the transportation and industrial markets out of 14 metalcasting facilities and two machining operations in the U.S.

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