ArvinMeritor 8-K 2012
Date of Report (Date of earliest event reported): March 15, 2012
2135 West Maple Road
Registrants telephone number, including area code: (248) 435-1000
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Item 1.01. Entry into a Material Definitive Agreement
The information set forth in Item 2.03 below is incorporated in this Item 1.01 by reference.
Item 2.03. Creation of a Direct Financial obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Meritor, Inc. (the Company) announced that on March 15, 2012, a subsidiary of the Company, Meritor Heavy Vehicle Systems Cameri S.P.A. (the Italian Subsidiary), entered into an arrangement to sell the Italian Subsidiarys trade receivables from AB Volvo and AB Volvos European subsidiaries. Under this arrangement, which expires in March 2017, the Italian Subsidiary may sell, at any point in time, up to €30 million of eligible trade receivables. The purchase price for the receivables under this program is the net face value of such receivables, discounted for the period of time from the date of sale to the anticipated date of payment at a rate equal to EURIBOR plus 1.08 percent per annum. The receivables sold under this program are excluded from the Companys consolidated balance sheet. The commitment is subject to standard terms and conditions for these types of arrangements including a sole discretion clause whereby the bank retains the right to not purchase receivables.
This arrangement is intended to effect an absolute transfer of the relevant receivables, and contains representations, warranties and covenants typical for such a transaction. It is also cross-defaulted to the Companys senior secured credit facility, and contains other customary events of default. For a further description of the covenants set forth in Meritors senior secured credit facility, please see Note 17 of the Notes to Consolidated Financial Statements and the discussion under the heading Liquidity in Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations in Meritors report on Form 10-Q for the quarterly period ended January 1, 2012.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.