The Lenders voted unanimously in favour of the company's proposal.
As part of the agreement reached with the banks, testing of the facility's earnings-related covenants will largely be suspended till March 2010 and will then resume with significantly higher flexibility than in the case of the original covenants. Furthermore, there will be no increase in the current level of interest costs for the remaining life of the loan. The revised covenant package does not involve any additional finance from the Lenders or rescheduling of its debt-servicing commitments.
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As part of the package Tata Steel will inject £425 million into Tata Steel UK in a phased manner, of which around £200 million will be used to prepay debt and de-leverage the European Balance Sheet.
Corus CEO Kirby Adams said: "This overwhelmingly positive response from our Lenders is a mark of their underlying faith in our business, even as we explore options for Teesside Cast Products. The Company will continue its focus on improving operating efficiency, as well as on enhancing customer relations and revenues through better product quality and service. We also look forward to stronger commercial relations with suppliers through an improved credit profile."
(CD/JM)
