Maytag Corp. (MYG.N: Quote, Profile, Research) shares rose more than 7 percent on Wednesday after a Prudential analyst said the appliance maker could get a loan that it could use to close plants or restructure debt.
In a research note, analyst Nicholas Heymann said more than 20 percent of Maytag’s outstanding shares had been shorted as of early March, and he cited the possibility for a cash infusion.
“We believe prospect for securing new cash, possibly structured as a secured loan, may be rising, potentially from an Asian appliance manufacturer eager to expand North American private label refrigeration business,” the note said.
Maytag, whose appliance brands include Jenn-Air and Amana, had no immediate comment on the report.
Prudential said Maytag could use any cash to close two or more plants, and added that a loan could also help in restructuring debt.
Maytag has been grappling with declining profits amid a prolonged slump at its Hoover vacuum unit and other challenges, including loss of display space at retail.
This year, Moody’s and Standard & Poor’s have cut Maytag’s debt ratings, citing weak financial performance. Analysts have said the company has higher manufacturing costs than other appliance makers, and it may reduce its dividend.
Maytag and rival Whirlpool Corp. (WHR.N: Quote, Profile, Research) plan to report first-quarter results next week. For Maytag, Prudential cited “strong prospects for nominal or even negative” first-quarter profit.
In morning trading, Maytag shares were up $1.04 at $15.27, while Whirlpool was down 24 cents to $68.
From Reuters