Polaroid Gains Agreement with Banks to Remain in Business as It Seeks Options
Press release from the issuing company
CAMBRIDGE, Mass., -- August 10, 2001 -- Polaroid Corporation (NYSE: PRD) today announced it has received a one-month extension of waivers on its bank loan covenants and a $10 million increase in availability under its domestic credit facility enhancing the company's near-term liquidity and operational stability. Separately, Polaroid extended secured creditor status to its bondholders in a move to help facilitate the restructuring of its debt.
"This news allows us to continue on a business-as-usual basis as we negotiate with bondholder representatives and bank lenders and explore strategic options for the company's future," said Gary T. DiCamillo, chairman and chief executive officer of Polaroid.
Under terms of the bank agreements, Polaroid received an extension to November 15 of its domestic and international loan-covenant waivers, which were due to expire on October 12. The company also received a $10 million increase in availability under its domestic credit facility. These actions will facilitate the implementation of a series of initiatives aimed at strengthening Polaroid's financial performance, while it restructures its debt.
"The $10 million increase in credit availability and waiver extension are positive steps," noted William L. Flaherty, executive vice president and chief financial officer. "These actions support the company's continuing ability to conduct its day to day business activities and meet its obligations to suppliers, vendors and employees."
As a result of negotiations with an ad hoc committee of bondholders and their legal and financial advisors, Polaroid pledged two additional properties in Massachusetts as security against both bank and bond debt. The ad hoc bonderholders' committee, which negotiated with the company on this arrangement, has retained the law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P. and financial advisor Houlihan Lokey Howard & Zukin.
"We have begun our dialogue with the company and believe that the interests of Polaroid's bondholders are best served in a stable negotiating environment," said a bondholder on the ad hoc committee. "With this arrangement, Polaroid and its banks have demonstrated sufficient effort to address bondholder concerns to give us confidence that we can continue our due diligence and negotiations toward an acceptable resolution."
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