Ames Department Stores and lenders agree to increase DIP by $25 million

By Sara Rosenberg

New York, June 17 - Ames Department Store Inc. reached an agreement with lenders to amend its debtor-in-possession financing in order to gain $25 million in additional availability, according to a company press release. GE Capital is the agent bank on the DIP.

The Rocky Hill, Conn. discount retailer's amendment is subject to court approval and a hearing has been scheduled for June 19, the release said. The additional $25 million would be for the company's unrestricted use.

Furthermore, the company reached an agreement with KRC Acquisition Corp. for the sale and leaseback of certain properties. This agreement is also subject to court approval on June 19.

"These two agreements and the resulting increase in availability show the significant impact of the actions that we, together with our lenders have taken to improve liquidity," said Joseph Ettore, chairman and chief executive officer, in the news release. "Together with our continued reductions in SG&A expenses, this new funding substantially improves our financial position and provides our vendor partners with the comfort level they need to continue extending credit and merchandise shipments."

On Aug. 20, 2001, Ames entered Chapter 11 with two completed agreements for DIP credit facilities totaling $755 million - $700 million from GE Capital and $55 million from Kimco Funding LLC. The bankruptcy court granted final approval of the DIP on Sept. 25, 2001.

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