S&P Reaffirms Credit and Debt Ratings for Dana
Corporation and Dana Credit Corporation Toledo, Ohio (ots-PRNewswire) - Standard & Poor's Corporation has affirmed its "A-" corporate credit rating and its "A-" senior unsecured debt rating on Dana Corporation (NYSE: DCN), and removed the ratings from its CreditWatch. The ratings of Dana's leasing subsidiary, Dana Credit Corporation, were also reaffirmed "A-" and removed from CreditWatch. In making the announcement, Standard & Poor's said, "The ratings reflect Standard & Poor's expectation that management will remain committed to debt reduction and succeed in restoring debt to capital to about 40 percent in the next 12 to 18 months. Dana Corporation has been restructuring and realigning its operations in the past three years to enhance its business profile. As part of this process, the company has bought and sold a number of operations. As a result, Dana Corporation's adjusted debt leverage was about 50 percent at year-end 1998. "Earlier this year, Dana announced that its Board had authorized a $350 million stock repurchase program. The ratings affirmations assume that Dana will offset the impact of any share repurchase under this program with proceeds from asset sales and that it will use free cash flow to repay debt." In April, Dana unveiled its Five-Point Plan, a tactical link to the company's overall strategic plan that includes the repurchase of stock as the company generates cash. Jack Simpson, Dana chief financial officer said, "The Five- Point Plan is key to enhancing shareholder value. We are extremely pleased that Standard & Poor's has confidence in our ability to manage this multi-faceted program within the context of our financial targets and debt-rating objectives. "The Five-Point Plan is a disciplined, comprehensive approach that will improve our operating performance and strengthen our balance sheet," Simpson said. The Five-Point Plan provides elements for continued growth and profitability over the next 12 to 18 months. The plan includes the following five tactics: * Grow while focusing on returns and maintaining financial discipline; * Seek strategic, bolt-on acquisitions at reasonable valuations; * Divest non-strategic and non-performing operations; * Repurchase stock as the company generates cash; and * Complete integration efforts and realize synergy savings. Consistent with this Plan, Dana last week announced its intention to sell the first two of a series of businesses identified for disposition. The businesses identified have total annual sales of approximately $850 million. In the largest divestiture in Dana's history, the company announced plans to sell its Warner Electric Industrial Products Group and part of its Warner Electric Industrial Motors and Controls Group. The company also announced its intention to sell its Commercial Vehicle Cab Systems Group. The Warner Electric Industrial Products Group manufactures industrial clutches and brakes, linear actuators, and ball bearing screws for a diverse range of applications. The Warner Electric Industrial Motors and Controls Group produces a wide range of precision electric motors and controls, electronic adjustable speed drives, power conditioning equipment, and voltage and lighting controls. The Warner operations to be divested had combined sales of approximately $360 million in 1998, and employ approximately 3,000 people at 18 major manufacturing and assembly facilities throughout the world. The Commercial Vehicle Cab Systems Group is a $91 million manufacturer of truck mirrors, windshield wiper systems and HVAC controls. Dana Corporation is one of the world's largest independent suppliers to vehicle manufacturers and their related aftermarkets. Founded in 1904 and based in Toledo, Ohio, the company operates some 330 major facilities in 32 countries and employs more than 86,000 people. The company reported sales of $12.5 billion in 1998. Dana's Internet address is www.dana.com . ots Original Text Service: Dana Corporation Internet: http://www.newsaktuell.de Contact: Gary Corrigan of Dana Corporation, (USA) 419-535-4813 Company News On-Call: http://www.prnewswire.com/comp/226839.html or fax, (USA) 800- 758-5804, ext. 226839 Web site: http://www.dana.com
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