NEW YORK - The Manitowoc Company, Inc. (NYSE:MTW), a leading global manufacturer of cranes and lifting solutions, has initiated a private offering of $300 million in senior secured second lien notes due 2031, contingent on market conditions and the successful amendment of its existing asset-based revolving credit facility. The amendment aims to increase the facility's commitments by $50 million, bringing the total to $325 million.
The Wisconsin-based company plans to use the proceeds from the offering, along with other available funds, to redeem all of its outstanding 9.00% Senior Secured Second Lien Notes due 2026, in addition to covering related fees and expenses. Any remaining funds will be allocated for general corporate purposes.
The notes, which are guaranteed by Manitowoc's domestic subsidiaries that also guarantee the amended credit facility, will be sold to qualified institutional buyers and certain non-U.S. persons in compliance with specific securities regulations. These notes and their guarantees have not been registered under the Securities Act of 1933 or any state securities laws and will not be unless an exemption is available.
This move by Manitowoc comes amid a challenging economic climate marked by inflation, interest rate hikes, and supply chain issues that have affected the company's ability to convert its backlog into revenue, potentially impacting its financial health and operational results.
The company's press release includes forward-looking statements, which are subject to uncertainties and changes in circumstances, and therefore, there is no guarantee that the offering or the amendment to the credit facility will be completed as planned.
Investors should note that this press release is not an offer to sell or solicit the purchase of the notes or any other securities and should not be considered as a redemption notice for the existing notes. The information is based on a press release statement from The Manitowoc Company, Inc.
In other recent news, The Manitowoc Company reported mixed financial results during its Second Quarter 2024 Earnings Conference Call. The company experienced a 22% year-over-year decline in orders due to geopolitical uncertainty, supply chain disruptions, and a slowdown in the European tower crane business. Consequently, Manitowoc's net sales and adjusted EBITDA fell below expectations, leading to a revised full-year 2024 guidance, with net sales projected to be between $2.175 billion and $2.25 billion. Despite these challenges, the company remains optimistic about long-term opportunities, particularly in infrastructure and aftermarket growth. However, operational issues are anticipated to persist for the remainder of the year. According to Tami Zakaria of JPMorgan (NYSE:JPM), the increase in interest rates has affected demand for cranes. Despite these developments, Manitowoc expressed confidence in the long-term prospects of the crane industry.
InvestingPro Insights
As The Manitowoc Company, Inc. (NYSE:MTW) navigates through a complex economic landscape, real-time data and insights from InvestingPro provide a clearer picture of the company's financial position and market performance. According to InvestingPro, Manitowoc is currently trading at a low P/E ratio relative to near-term earnings growth, with a P/E ratio (Adjusted) for the last twelve months as of Q2 2024 standing at 11.37. This suggests that the company's earnings growth may not be fully reflected in its current stock price, potentially presenting an opportunity for investors.
InvestingPro Tips indicate that Manitowoc operates with a significant debt burden, which is a crucial consideration for investors as the company seeks to refinance its existing obligations with the new senior secured notes offering. Additionally, the company's stock price has experienced substantial volatility, with a 25.59% drop over the last six months, highlighting the risks associated with investing in the firm during tumultuous market conditions.
InvestingPro Data metrics further reveal that Manitowoc has a Market Cap (Adjusted) of $354.33M and a Revenue Growth (Quarterly) for Q2 2024 at -6.75%, reflecting recent challenges in generating sales. Despite these challenges, the company's liquid assets exceed its short-term obligations, which may provide some financial stability in the near term.
For investors seeking a more comprehensive analysis of Manitowoc, there are additional InvestingPro Tips available at https://www.investing.com/pro/MTW, which can offer deeper insights into the company's financial health and market potential.
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