Warnaco Credit-Line Decrease Is Approved

Warnaco Group Inc. won court approval to decrease its bankruptcy credit line by $125million and reduce certain earnings targets.

Lenders to the maker of Calvin Klein jeans and Speedo swimsuits are demanding the company file a Chapter 11 recovery plan before August.

Warnaco, which filed for bankruptcy protection in June, said it has more money than expected because its cash-management systems have improved.

As a result, the New York-based company agreed to reduce the amount available under its bankruptcy credit line to $475million from $600million.

Under the amended credit line,Warnaco must file a plan of reorganization with the court by July 31, although creditor Citibank can extend the deadline.

The $475-million credit line “will be sufficient to help fund our operations and finalize a plan of reorganization in mid- to late 2002,” Warnaco Chief Executive Tony Alvarez said.

“We are moving forward with the sale of specific, non-core assets, and we expect that process to accelerate in the new year,” he said.

Shares of Warnaco, which have plunged more than 96% in the last year, fell less than a cent to 5 cents in over-the-counter trading.