Dana In Financing Talks With Banks

Posted on February 28, 2006

Troubled component supplier Dana Corp. said it was in continuing discussions with banks on financing alternatives, a move seen as reducing the immediate risk of a bankruptcy filing. The company's shares, which plunged recently, closed up almost 18%.

Dana, whose credit ratings were cut last week over uncertainty about its outlook, said it expected a resolution to its financing talks within the next two weeks. The company also said it had obtained a waiver of the minimum credit rating stipulated under a program to securitize its accounts receivable payments.

Both developments were seen as positive by creditors and stock investors, who sold heavily last week after The Wall Street Journal reported Dana had retained restructuring adviser Miller Buckfire & Co. Toledo, Ohio-based Dana had declined to comment on the report, which was seen as an indication that it could be contemplating a bankruptcy filing.