Grove Worldwide, a worldwide provider of mobile hydraulic cranes, truck mounted cranes and aerial work platforms, announced on May 7 that it had received Bankruptcy Court approval to, among other things, pay pre-petition and post-petition employee wages, salaries and benefits during its voluntary restructuring under Chapter 11.
The Court also approved $10 million of interim debtor-in-possession (DIP) financing for immediate use by the company to continue operations, pay employees, and purchase goods and services going forward. In conjunction with the filing, Grove received commitments for up to $35 million in DIP from a group of its pre-petition lenders led by The Chase Manhattan Bank to fund operations during the restructuring. The final hearing on the DIP agreement has been set for May 30, 2001.
Chairman and Chief Executive Officer Jeffry D. Bust said he was pleased with the Bankruptcy Court’s prompt approval of its first-day orders and interim DIP financing.
"We expect the DIP financing to provide adequate funding for our post-petition trade and employee obligations," Bust said, noting that the company has been in contact with many of its major suppliers and customers, who have indicated that they will support Grove during the restructuring process, which is expected to conclude within a matter of months.
The Court also granted approval for the company to honor all warranties, refunds and other customer service programs.
Grove also announced on May 7 that it had reached an agreement with its secured lender bank group and is actively negotiating with its senior bondholders on a financial restructuring of the company. Under the terms of the plan, Grove Worldwide’s debt will be reduced from $584 million to $205 million and annual interest expense would be reduced from $63 million to $17 million. To implement the restructuring, Grove Worldwide filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code together with a "prenegotiated" plan of reorganization that embodies the terms of the restructuring.
The filing includes the Company’s domestic operations headquartered in Shady Grove, PA, and its National Crane subsidiary located in Waverly, NE. All of the Grove’s operations outside the United States—in the United Kingdom, France, Germany, Australia, Singapore, China and the United Arab Emirates—are excluded from the filing.
