SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 18, 2006
(Exact Name of Registrant as Specified in its Charter)
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| Georgia
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0-22276
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58-0360550 |
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
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| 160 Clairemont Avenue, Suite 200, Decatur, Georgia
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30030 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code (404) 373-4285
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement
On April 19, 2006, Allied Holdings, Inc. (the “Company”) entered into an amendment (the
“Amendment”) to the Company’s Debtor-in-Possession Credit Agreement, as previously amended (the
“DIP Facility”), by and among the Company, Allied Systems, Ltd. (L.P.) and certain subsidiaries of
the Company, on the one hand, and GE Commercial Finance, Morgan Stanley Senior Funding, Inc., GE
Capital Markets Group, Inc., and the other lenders from time to time party thereto (collectively,
the “Lenders”). The material terms of the Amendment are as follows:
l Creation of Overadvance Facility. The Amendment provides for the creation of an
overadvance facility under the Term B Loan, pursuant to which up to an additional $5 million
may be advanced to the Company at the discretion of Morgan Stanley Senior Funding, Inc. as the
Term Loan B Agent (the “Term Loan B Agent”). The maturity date for the overadvance facility
is May 18, 2006 (the “Maturity Date”), provided, however, that the Maturity Date may be
extended for up to an additional 30 days, in the sole discretion of the Term B Agent, if
certain conditions are met by the Company, including filing with and approval by the United
States Bankruptcy Court for the Northern District of Georgia, of an emergency motion for a 10%
reduction in the wages and benefits payable to the Company’s employees covered by its
collective bargaining agreement with the International Brotherhood of Teamsters. The Company
filed such emergency motion on April 13, 2006 and such motion is currently pending before the
court with a hearing on the motion set for April 26, 2006. The overadvance facility bears
interest at a rate equal to one-month LIBOR plus 9.5%. However, as described below, any
advances under the overadvance facility currently bear interest at the Default Rate.
l Application of Default Rate of Interest. As a result of the Company’s previously
announced financial covenant defaults under the DIP Facility, for which the Company entered
into a Forbearance Agreement with the Lenders on March 9, 2006 (the “Forbearance Agreement”)
and which forbearance was extended on April 3, 2006, the Company has agreed to pay the Default
Rate of interest on all loans under the DIP Facility, including the new overadvance facility.
The Default Rates of interest is 2% over the otherwise applicable interest rates.
The Default Rates will apply until the Company obtains a commitment for additional funds
in an amount not less than $20 million, with such funds to be provided on or before June 19, 2006. Such
commitment must be on terms satisfactory to the Agents under the DIP Facility. If the Company
is able to obtain a commitment for such additional funds, all interest rates under the DIP
Facility will revert back to the non-Default Rates as long as there
are no additional events of default under the DIP facility. No assurance can be provided however that
the Company will be successful in obtaining such commitment for additional funds, or that if
obtained, it will be on terms satisfactory to the Agents.
l Prepayment Penalty. Under the Amendment, in the event the Company voluntarily
prepays any or all of the term loans under the DIP Facility, including the overadvance
facility, except in connection with a refinancing of the DIP Facility provided by Term Loan B
Agent, the Company is required to pay a prepayment premium in the amount of 1% of the
principal amount of the loans being prepaid.
l Amendment to Certain Financial Covenants. The Amendment revises, for the
applicable periods ending March 31, 2006, April 30, 2006 and May 31, 2006 only, financial
covenants in the DIP Facility relating to maximum capital expenditures, the minimum fixed
charge coverage ratio, minimum EBITDA and the maximum leverage ratio. The amendment to these
covenants does not affect the Company’s prior covenant defaults that are the subject of
the Forbearance Agreement.
l Extension of Forbearance. The Amendment further extends the applicable
forbearance period under the Forbearance Agreement from April 18, 2006 until the Maturity
Date, as the same may be extended from time to time. However, under the terms of the
Amendment, the Company acknowledged that such extension does not constitute a waiver of the
Events of Default that are the subject of the Forbearance Agreement and the Lenders have
reserved all rights and remedies available to them under the DIP Facility for such Events of
Default.
Except as described above, all other material terms and conditions of the DIP Facility are
unchanged by the Amendment and remain in full force and effect. A copy of the Amendment is filed
herewith as Exhibit 4.3(c).
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| Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant |
The description of the overadvance facility included in response to Item 1.01 above is
incorporated by reference into this Item 2.03.
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| Item 9.01 |
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Financial Statements and Exhibits |
(d) Exhibits
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| Exhibit No. |
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Description of Exhibit |
4.3(c)
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Consent and Fourth Amendment to Credit Agreement and Loan Documents dated as of April
18, 2006 |