FORSTMANN SIGNS AGREEMENT FOR POST-PETITION FINANCING
NEW YORK — Forstmann & Co. has entered into an agreement for post-petition financing that should enable it to emerge from bankruptcy proceedings this summer.
The manufacturer of woolen and worsted fabrics, in bankruptcy proceedings since September 1995, said the $110 million three-year facility is with Bank America Business Credit Inc.
It includes revolving credit loans to cover working capital needs and a term loan of $31.5 million to be used to refinance certain existing secured borrowings.
The agreement is subject to Manhattan bankruptcy court approval, with a hearing scheduled for April 15.
Robert N. Dangremond, president and chief executive officer, said the facility “will provide Forstmann with adequate financing after it emerges from bankruptcy” and the company plans to shortly file a reorganization plan.
“We expected to be able to consummate the plan of reorganization and emerge this summer,” Dangremond said.
In the first quarter ended Feb. 2, Forstmann sliced its operating loss in to $1.6 million from $3.9 million a year ago, and net loss after interest and reorganization costs to $7.3 million from $9.1 million a year ago. Sales fell 6.3 percent to $31.2 million.