Pope & Talbot in talks with loan group on amending, waiving EBITDA covenant

By Sara Rosenberg

New York, May 10 - Pope & Talbot, Inc. is currently talking to its bank group about an amendment or waiver of the EBITDA covenant for the periods ending June 30, Sept. 30 and Dec. 31, according to a company news release.

The company is seeking the amendment/waiver because it expects to be unable to comply with the EBITDA covenant due to low lumber prices in the wood products business, raw material cost and availability issues in the pulp business, expenses related to the planned annual maintenance shutdown of its Nanaimo pulp mill and expenses related to a mechanical failure in the Kamyr digester at its Mackenzie pulp mill.

At March 31, the company had $23.5 million used under its $75 million revolving credit facility, total debt was $344 million, an increase of $23 million from Dec. 31, and the ratio of long-term debt to total capitalization was 77%, up from 73% at Dec. 31.

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

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