Auto-parts supplier Dana meeting with banks | VailDaily.com
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Auto-parts supplier Dana meeting with banks

TOLEDO, Ohio – Dana Corp.’s stock rebounded 27 percent on Monday after the auto parts maker said it was working with banks and other lenders on its financing plans.The company issued a short statement before trading began on the New York Stock Exchange, saying it hopes to come to a resolution within two weeks on its financing.Dana’s shares, which tumbled 52 percent on Friday to their lowest level in more than three decades, climbed 40 cents to $1.91 in afternoon trading.The company’s stock has been falling since Dana said last fall that it was restating earnings and lowering its profit forecast for 2005 because of accounting errors.Reports last week that the struggling auto parts maker had hired a restructuring company led to extremely heavy trading and speculation that the company could be facing bankruptcy.Dana also has been hurt by soaring energy and steel prices and said in January that it lost nearly $1.3 billion in the third quarter last year while realigning its business.Auto parts suppliers over the last year have struggled. Delphi Corp., the nation’s leading supplier, filed for Chapter 11 bankruptcy protection in October. Visteon Corp., the nation’s second-biggest parts supplier, is closing three plants and putting another six up for sale under its restructuring plan.”I’m sure there are people thinking that Dana’s next,” said David Siino, an analyst with Gabelli & Co.Dana still has assets that would allow it to borrow money and has little long-term debt due in the next two years, he said. “They have a little bit of breathing room,” he said.But Shelly Lombard, a senior analyst with Gimme Credit, a corporate bonds research service, said Dana’s response to the bankruptcy speculation was late and not enough.”It did nothing to assure investors that a deal is imminent,” Lombard saidSean Egan, managing director of Egan-Jones Ratings Co., said Dana is likely reviewing a number of financing options, but first it must line up funding with its banks and calm fears of investors and the company’s suppliers that are owed money.”It’s going to be difficult,” he said. “Dana is facing the same problems that all suppliers to the U.S. auto manufacturing industry are facing.”Dana, a supplier of drivetrain, chassis, structural and engine technologies, employs 46,000 people in 28 countries. The company reported sales of $9 billion in 2004.—On the Net:Dana Corp.: http://www.dana.com


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