TECUMSEH - To accelerate paying off its debts, Tecumseh Products Co. has hired an investment bank to evaluate whether it should sell more operations, the Michigan company revealed yesterday.
The maker of refrigeration compressors and engines for lawn mowers and snow blowers is looking at all operations to see how they fit into its core business, whether they can sustain a competitive advantage, and if they would generate more being sold than internally managed, said James Nicholson, vice president, treasurer, and chief financial officer.
Mr. Nicholson told analysts and investors yesterday that Tecumseh Products considers its compressor business to be core. Overall, the company has nearly three dozen facilities in 10 countries.
"Under the direction of the board of directors, the company is evaluating all of its assets," Mr. Nicholson said.
The moves are to stem the financial problems of the firm, which have resulted in repeated efforts in recent years to renegotiate loan terms.
Tecumseh Products, which had $1.85 billion in sales last year, sold off its Little Giant pump unit this year for $120 million. Pumps sold through Little Giant and another unit last year accounted for 7 percent of the firm's business, compared with 49 percent for compressors and 22 percent each for engines and electrical components.
The Tecumseh company reported this week it lost $45.3 million in the third quarter, or $2.45 a share, compared with a loss of $37.8 million, or $2.05 a share, in the same period a year ago. Results for both quarters excluded income from the Little Giant pump unit.
Tecumseh Products this year increased its second lien debt from $55 million to $100 million, Mr. Nicholson said.
In Brazil, meanwhile, the company has reached an agreement with all but two lenders to renegotiate about $87 million in debt payments, Mr. Nicholson said.
It has filed a lawsuit to force those lenders to comply with the others and hopes to reach a settlement, he said.
Investors apparently were not displeased by the executive's comments. The company stock rose 15 cents to close at $16.55 yesterday on Nasdaq.