American Axle & Manufacturing Holdings Inc. (AAM) reached a new commercial agreement with General Motors Co., as well as a revised credit agreement with lenders.
The agreements include loans from GM to AAM and warrants to the parts supplier's former parent company. It also negotiated amended credit agreements, ending negotiations to keep it out of bankruptcy. The 3Q profits on sales have been reported to be around $400 million.
The warrants issued totaled 4.1 million shares of its stock to GM on an exercise price of $2.76/share. AAM also agreed to issue another 6.9 million warrants at the same price based on a second lien term loan ($100 million) that GM agreed to give to AAM.
The automaker had agreed to not acquire more than 20% of AAM, and will pay $110 million to resolve costs related to its own bankruptcy and other obligations. It also agreed to make expedited parts payments through June 2011 in exchange for a 1% discount.