American Axle Shares Up Again (Update)

(Updated for second-day stock movement and to include further detail from the company's regulatory filing Tuesday)

DETROIT (TheStreet) -- Shares of auto-parts supplier American Axle(AXL Quote) continued to advance Wednesday, one day after the company struck a crucial deal with creditors, perhaps saving itself from insolvency.

The news lifted its stock price by more than 100% in frantic trading Tuesday. Late in Wednesday's session, the shares were changing hands at $6.27, up 57 cents, or 10%, on heavy volume of 60 million shares.

In a filing with the SEC, the company, which has been attempting to restructure its debt outside of bankruptcy court, said it was able to convince its lenders to extend the waiver on a revolving credit line. The waiver would have expired Thursday. The new deal gives the company until Aug. 31 to renegotiate its debt agreements with its lenders.

In related news, General Motors agreed to pump as much as $210 million into American Axle so that the maker of drivetrains could, in part, recover costs from contracts scrapped during GM's bankruptcy workout. (American Axle does about 75% of its business with GM.)

Of that $210 million sum, $110 million will be a direct payment to American Axle from GM. The other $100 million will be in the form of a second-lien term loan, which American Axle will be able to draw from until late in 2013.

The GM portion of the agreement will only kick in, however, if American Axle is able to renegotiate its debt agreements by the new deadline.

The GM largesse does not come without its catches, however. Under the terms of the deal, American Axle will issue to GM a series of five-year warrants that give GM the right to purchase up to 19.9% of American Axle's common stock. Also, GM has the right to terminate one previously awarded supply program with American Axle and to re-source it with another company.