Fleetwood Enterprises Inc. has successfully restructured its revolving line of credit, thus eliminating the need for it to pay a $1.9 million fee on Sunday, and lowering the amount of its required cash reserve by $20 million.
Fleetwood’s line of credit is with a syndicate of banks led by Bank of America. The banks agreed to reduce Fleetwood’s borrowing power to $110 million from $190 million, but Fleetwood executives reported today (Jan. 27) that $110 million more closely matches the value of the RV and manufactured home builder’s inventory and receivables.
Lowering the amount available to Fleetwood under the line of credit also lowered the amount of the cash Fleetwood has to reserve in order to borrow to $30 million from $50 million. It also eliminated the $1.9 million fee that Fleetwood would have had to pay on Sunday, which was the last day of the third quarter of its fiscal year 2003.
“The covenants (to the credit line) remain essentially unchanged, and Fleetwood remains in full compliance with these convenants,” Fleetwood CFO Boyd Plowman said.
Fleetwood returned to profitability during its second fiscal quarter, which ended in late October, after nine consecutive money-losing quarters.
Company executives have said Fleetwood most likely will report another loss during its typically slow third fiscal quarter, before returning to profitability during the February-through-April period.