Dan River on Comeback Trail
November 8, 2004-- Home Textiles Today,
Danville, Va. — Paving the way for an exit from bankruptcy as early as January — less than 10 months after retreating into Chapter 11 — Dan River Inc. said it has lined up exit financing from a consortium of lenders, and has scheduled a confirmation hearing in U.S. Bankruptcy Court on Jan. 4.
The Jan. 4 court hearing is the last step required for the company to emerge from bankruptcy. Dan River filed for bankruptcy protection from its creditors on March 31.
"This is a significant milestone on the road to our emergence from Chapter 11 early next year," said Joseph Lanier Jr., chairman and CEO.
In a further cash infusion, Dan River said the bankruptcy court green-lighted the company to use cash collateral to fund its current and ongoing operations. Additionally, the court approved, on an interim basis, an additional new $10 million senior secured credit facility to be provided by some of Dan River's existing bondholders.
The new $10 million facility is in addition to the existing $110 million debtor-in-possession (DIP) revolving credit facility, and a $35 million DIP term loan already in place.
Dan River said it lined up the additional financing from current bondholders when it was unable to cut a deal with existing DIP lenders about non-financial debt covenants.
The company said the use of the cash collateral and the new $10 million credit facility "are expected to provide adequate funding for the company's operations through the conclusion of the Chapter 11 process."
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