Exhibit 99.1
NEWS RELEASE
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CONTACT: Tom Armstrong
Kevin McDermed
913 367 2121
OTCBB:AHNC.OB OTCBB: AHNC.OB
ATCHISON CASTING CORPORATION ENTERS
EXTENSIONS OF NORTH AMERICAN CREDIT FACILITIES
Atchison, Kansas - October 22, 2002 - Atchison Casting Corporation
(OTCBB:AHNC.OB) today announced the extension of its North American credit
facilities.
The lenders' agreements with the Company to forbear from enforcing their
rights related to various events of default under the revolving credit facility
with Harris Trust and Savings Bank and the senior notes with an insurance
company (such lenders, collectively, the "Harris Lenders") has been extended
from October 17, 2002 to April 3, 2003, subject to certain events that could
cause an earlier termination of this forbearance period. In exchange, the
Company agreed, among other things, (i) to engage an investment banker to
solicit offers on additional operations; and (ii) to prepay the Harris Lenders'
loans in amounts equal to $4.0 million by January 15, 2003 and an additional
$7.0 million by February 28, 2003, which the Company expects to satisfy out of
the net proceeds from asset sales and tax refunds. In addition, if new financial
covenants are not agreed upon by November 30, 2002, the forbearance will
terminate.
The lenders represented by General Electric Capital Corporation (such
lenders, collectively, the "GE Lenders") have also agreed to forbear until June
29, 2003 from exercising remedies available to them due to defaults under their
term loan with the Company, subject to earlier termination upon the occurrence
of certain defaults. If minimum financial performance levels are achieved as of
June 30, 2003, the forbearance period will be extended an additional three
months. The forbearance period will be extended another three months, until
December 29, 2003, if the Company achieves minimum financial performance levels
as of September 30, 2003. The GE Lenders also agreed to allow the Company to
make only interest payments through the end of the forbearance period. In
exchange, the Company has agreed to increase the interest rate 25 basis points
to 9.30% per year.
The termination of the forbearance period in any of these agreements can
result in the termination of the other agreements.
"We are continuing to focus on ways to reduce our debt levels," said Tom
Armstrong, Chief Executive Officer. "We are now actively soliciting offers on
several locations," continued Mr. Armstrong. "We believe we are taking the right
steps to strengthen the Company. Fortunately, our
ATCHISON CASTING CORPORATION
400 SOUTH FOURTH STREET o P.O. BOX 188o ATCHISON, KANSAS 66002-0188 o
(913)367-2121 o FAX (913)367-2155
banks have continued to work with us as we complete those steps, which to date
have included both the sale and closure of certain operations," concluded Mr.
Armstrong.
ACC produces iron, steel and non-ferrous castings for a wide variety of
equipment, capital goods and consumer markets.
This press release contains forward-looking statements that involve risks and
uncertainties. Such statements include the Company's expectations as to future
performance and contingent obligations. Among the factors that could cause
actual results to differ materially from the forward looking statements are the
following: the results of the litigation with Deloitte and Touche LLP, the
re-audit of any financial statements, costs of closing foundries, the results of
the liquidation of the Company's wholly-owned subsidiary Fonderie d'Autun, the
amount of any claims made against Fonderie d'Autun's prior owner which are the
subject of certain guarantees, business conditions and the state of the general
economy in Europe and the US, particularly the capital goods industry, the
strength of the U.S. dollar, British pound sterling and the Euro, interest
rates, the Company's ability to renegotiate or refinance its lending
arrangements, continued compliance with the terms of various forbearance
agreements with the Company's lenders, utility rates, the availability of labor,
the successful conclusion of union contract negotiations, the results of any
litigation arising out of the accident at Jahn Foundry, results of any
litigation or regulatory proceedings arising from the accounting irregularities
at the Pennsylvania Foundry Group, the competitive environment in the casting
industry and changes in laws and regulations that govern the Company's business,
particularly environmental regulations.
ATCHISON CASTING CORPORATION
400 SOUTH FOURTH STREET o P.O. BOX 188o ATCHISON, KANSAS 66002-0188 o
(913)367-2121 o FAX (913)367-2155
