BURLINGTON GETS $190M DIP
Byline: Scott Malone
NEW YORK — Passing the first critical hurdle in its Chapter 11 proceedings, Burlington Industries Inc. received bankruptcy court approval on Thursday for $190 million in debtor-in-possession financing.
The Greensboro, N.C.-based firm said J.P. Morgan Chase Bank is underwriting the DIP financing, which increases Burlington’s available credit from $125 million. This will allow the mill to continue running its business as usual while it restructures.
As reported, Burlington filed for bankruptcy protection last month in a Wilmington, Del., court, saying it had been hammered by competition from low-cost imports. Despite repeated restructuring moves over the past few years, the company has ended its last three fiscal years in the red.
Last week, in its first big change since the filing, Burlington merged its Casual Wear and Performance Wear divisions to form Burlington North American Fabrics, which encompasses all its apparel fabrics manufacturing facilities in the U.S. and Mexico.
A company spokeswoman described that move as a first step, and said the company hadn’t yet determined what sort of layoffs or plant realignment might follow.
A source this week said Burlington is looking to sell its Mexican jeans-making operation, a venture founded in the late Nineties in an effort to extend the mill’s reach further up the supply chain.
The spokeswoman said no firm decisions have been made on any major changes at the apparel unit. But in a July conference call, Burlington executives said that unit had been losing money because of spotty demand and added they were “not satisfied with the garment operations.”