Manitou subsidiary Gehl Company has reached an agreement with its lenders, allowing the company access to credit and time to negotiate a new credit agreement.

As of 31 March, Gehl owed a group of US banks USD117 milllion as part of a revolving credit agreement it entered into in 2006.

On 16 April, discussions between Gehl and its bankers resulted in a notice of debt repayment by the lenders being rescinded, and Gehl granted access to credit through the agreement it entered into in 2006. The two parties' agreement includes a 75-day period to negotiate changes to the credit arrangement.

Gehl says it expects to reduce its debt in 2009 using cash generated from its operations. It also anticipates entering into a long-term secured credit facility to replace the old credit agreement.

Manitou BF's EUR235 million (USD311 million) acquisition of Gehl negatively affected its 2008 financial results. The group's net profit was EUR4 million (USD5.3 million) after EUR52 million (USD68.9 million) in goodwill impairment related to Gehl (Forkliftaction.com News #405).