VIENNA, Va., March 20, 2002 (PRIMEZONE) -- Allied Research Corporation (AMEX:ALR) announces the approval of a new credit facility by its European bank syndicate for Allied Research's European subsidiary, MECAR, S.A. The new credit facility provides approximately $44 million U.S. dollars (Euro 50 million) of committed debt capital.
General (Retired) J. H. Binford Peay III, Allied Research's Chairman and CEO, said, "This is a very significant event for the Company. This committed and flexible facility more closely reflects credit market conditions, our strong financial condition and business outlook, and the credit quality of our corporation. Until now, we have not had this kind of sustained credit support and the ability to access earnings from subsidiary operations needed to provide increased liquidity for Allied Research's new growth strategy."
In conjunction with CBC Banque, the lead bank in the company's long-standing European bank syndicate, the Company put in place a new term credit facility that replaces one established in the early 1990s. The new credit facility increases committed credit capacity by over $19 million U.S. dollars (Euro 22 million) and combines several independent lines into a single, comprehensive one. About three quarters of the total credit facility is available for payment guarantees and performance bonds, while the balance is available as a cash line for working capital. Restrictive terms in the prior agreement have been replaced with conventional operating covenants that should better facilitate distribution of subsidiary-free cash to improve Allied Research's liquidity. The new subsidiary credit facility also streamlines the collateral base by releasing other Allied Research subsidiaries from various collateral pledges and guarantees that were provided under the prior agreement.
General Peay also stated, "This is a significant milestone for MECAR, whose outstanding new products and marketing efforts have recently driven their long term backlog to approximately $180 million. It should supply the necessary working capital and other credit support to provide Mecar with long term financial stability and permit MECAR to grow at the rates of the markets it serves."
General Peay, concluded, "Allied Research is a global enterprise and this new credit facility helps provide us with the flexibility to deploy our resources where we can get the best return for shareholders. This is a material improvement in the credit relationships the Company has enjoyed, and this new banking arrangement facilitates our plans to further upgrade Allied Research's overall capital structure, as well as opening new strategic alternatives."
The European bank syndicate is headed by CBC Banque, and includes Commerzbank, Deutsche Bank, Wafabank and Fortis Banque.
About Allied Research Corporation
Allied Research Corporation is a diversified defense and security firm, developing and producing conventional ammunition marketed to defense departments worldwide; and designing, producing and marketing sophisticated electronic security systems for European, Asian, African, North American and South American markets.
For more Information, please visit the Company web site: www.alliedresearch.com
Certain statements contained herein are "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.