Pope & Talbot gets forbearance on EBITDA covenant, looking at balance sheet options, sale of company

By Sara Rosenberg

New York, Aug. 6 - Pope & Talbot Inc. has received a forbearance agreement from its credit facility lenders regarding non-compliance with the EBITDA requirement for the four-quarter period ended June 30, according to an 8-K filed with the Securities and Exchange Commission Monday.

Lenders have agreed to forbear from exercising any rights or remedies until Sept. 17.

The company said it "continues to explore options to improve its balance sheet."

In addition, the forbearance requires it to solicit offers to purchase all or substantially all of its assets or equity interests.

The agreement was entered into on Aug. 3 and is dated as of July 31.

In connection with the agreement, the total availability under the revolver was reduced to $67 million from $75 million and a 200 basis points default interest rate was added to all borrowings effective as of July 1.

Wells Fargo Financial is the administrative agent on the deal.

Pope & Talbot is a Portland, Ore.-based forest products company.

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