Applied Extrusion amends credit facility, expects to reach debt agreement before grace period ends

New York, June 30 - Applied Extrusion Technologies, Inc. said it amended its credit facility with GE Commercial Finance to adjust covenants among other things.

Under the amendment, the minimum EBITDA requirement for the third fiscal quarter of 2004 is reduced to $30 million from $35 million and the minimum fixed charge coverage ratio covenant to 0.55 from 0.70.

The amendment also restricts the company from paying the interest due July 1 on its 10¾% senior notes unless it has excess availability under its current credit facility of $20 million after giving effect to the interest payment.

Applied Extrusion said that it would not reach the excess availability test.

It said it believes it has the ability to raise additional financing to pay the interest before the end of the grace period.

But it said it is more likely that it will reach agreement with bondholders on a recapitalization plan before the 30 days are up.

The New Castle, Del. specialized oriented polypropylene films manufacturer said talks with the ad hoc committee of bondholders, who own more than a majority of the notes, are continuing.

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