Polymer Group bank lenders block interest on notes, company looking at restructuring

New York, Dec. 31 - Polymer Group, Inc. said its bank lenders issued a notice blocking the $17.8 million interest payment due Jan. 2, 2002 on its 9% senior subordinated notes maturing 2007. It also said it is working on a financial restructuring and has hired Dresdner Kleinwort Wasserstein to advise.

Blockage of the payment follows a forbearance agreement between the North Charleston, S.C. engineered materials company and its senior bank lenders.

The agreement was reached after the waiver of a covenant default expired on Dec. 29. With the end of the waiver, the company is in default on its credit facility due to non-compliance with financial covenants.

Polymer Group said it remains current on payments under its credit facility.

The forbearance agreement runs through March 29, 2002, subject to earlier termination if certain events occur including exercise of any remedies by holders of the senior subordinated notes.

The forbearance will also end if Polymer Group "fails to complete certain actions over the course of the next month leading to a financial restructuring."

The company also said it has a 30-day grace period before failure to make the interest payment on the notes becomes a default.

In addition to blocking the interest payment, Polymer's bank lenders have also barred the company from making any further draws on its revolver. Polymer Group said it has sufficient liquidity to meet current obligations and has more than $45 million of cash and short-term investments, enough to operate its business as normal.

End

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.