NEW YORK — The Warnaco Group Inc. on Thursday received Manhattan bankruptcy court approval to amend its debtor-in-possession financing facility and lower it by $125 million.

The amendment modifies the required level of EBITDAR — earnings before interest, taxes, depreciation, amortization and certain restructuring charges — under the original DIP arrangement. Warnaco said that because it has “significant improvements in cash management,” the amount of the facility has been reduced to $475 million from $600 million.

Under the amended agreement, the company is required by its bank lenders to file a plan of reorganization by July 31, 2002. The deadline may be extended at the discretion of the administrative agent for the lending group.

Tony Alvarez, chief executive officer, said in a statement, “Our post-petition experience has indicated that the revised DIP facility will be sufficient to help fund our operations and finalize a plan of reorganization in mid- to late-2002. We are moving forward with the sale of specific, non-core assets, and we expect that process to accelerate in the new year.”

As reported, Polo Ralph Lauren is looking at a possible acquisition of its Chaps by Ralph Lauren license while Tommy Hilfiger is one of the names mentioned as keen on buying the Calvin Klein Jeanswear license.

Earlier this month, Warnaco received bankruptcy court approval to conduct an auction of its GJM division, the private label sleepwear and intimate apparel operation. According to a Warnaco spokesman, an auction will take place on Jan. 15, with the submission of bids to occur on Jan. 10.

According to bankruptcy court documents, Warnaco reserves the right to cancel the proposed sale in the event that either a suitable purchase price or satisfactory terms of sale cannot be reached.

Founded in 1985, GJM had 2000 sales of $76 million, about 80 percent of which were made to retail accounts.

Warnaco said in court papers that it decided to sell GJM because of the “continuing deterioration of that business during the course” of the bankruptcy. The uncertainties in connection with the bankruptcy, Warnaco said, have “placed GJM at a competitive disadvantage, which has adversely impacted its book of orders, prospects and profitability.”

Around mid-September, Warnaco contacted 92 entities to solicit their interest in acquiring GJM, which included 61 industry participants and 31 potential investors. The prospective buyers were from the U.S., Europe, the Mideast and Asia, but so far haven’t reached the definitive purchase agreement stage, Warnaco said.

According to a Securities and Exchange Commission filing last month, Goldman Sachs Group Inc., through Spear, Leeds & Kellogg, is deemed to be a beneficial owner of Warnaco shares, holding more than 10 percent of the shares of Class A common stock for the period ended April 7, 2001.

The SEC filing also said that Sid R. Bass, through Prime 66 Partners, ceased to be the beneficial owner of 5 percent or more of shares of Warnaco stock as of Nov. 19. Bass reportedly sold 7.5 million shares. Warnaco shares were trading at about 5 cents at the time, according to the Pink Sheets. Warnaco has been trading over-the-counter since shortly after it filed for bankruptcy on June 11.”122801″>”NEWS>”1201″>”2001″>”WOMENS>

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