Item 8.01. Other Events.
As previously disclosed in the Neenah Foundry Company ("Neenah") and Neenah
Enterprises, Inc. (collectively, the "Company") Form 10-K for the fiscal year
ended September 30, 2008 (the "2008 Form 10-K"), on December 23, 2008, the
Company provided notice to Tontine Capital Partners, L.P., as the holder of all
of Neenah's $75 million of 12 1/2% Senior Subordinated Notes due 2013 (the "12
1/2% Notes"), that Neenah was electing to defer the payment of 7 1/2% of the
interest due on the 12 1/2% Notes with respect to the January 1, 2009 interest
payment date (representing a deferral of an interest payment of approximately
$2.8 million), as is permitted under the terms of the outstanding 12 1/2% Notes.
Accordingly, Neenah has deferred the payment of such interest and the remainder
of the interest has been paid in cash (representing a cash interest payment of
approximately $1.9 million). Neenah is required to pay interest on the deferred
interest at a rate of 12.5% per annum.
After taking into account the $1.9 million cash interest payment on the 12 1/2%
Notes, as well as the January 2009 interest payment of approximately
$10.7 million on Neenah's $225 million of 9 1/2% Senior Secured Notes due 2017,
the outstanding balance on Neenah's 2006 amended and restated credit facility
(the "Credit Facility"), as of January 2, 2009, was $70.6 million, the borrowing
base under the Credit Facility was $94.3 million and, accordingly, the Company
had unused availability of $23.7 million, or $8.7 million in excess of the
$15.0 million availability threshold discussed in the 2008 Form 10-K.
For a discussion of the covenants and requirements contained in our debt
agreements please refer to the 2008 Form 10-K, including the discussion
contained in "Item 1A. Risk Factors - The terms of Neenah's debt impose
restrictions on us that may affect our ability to successfully operate our
business. In addition, we may violate applicable financial covenants in our debt
agreements if the unused availability under our 2006 Credit Facility falls below
$15.0 million" and under "Item 7. - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."
