Warnaco Credit-Line Decrease Is Approved
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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.
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