Royster-Clark negotiating loan covenants to avoid non-compliance at Sept. 30

By Sara Rosenberg

New York, Aug. 13 - Royster-Clark Inc. anticipates being in non-compliance with certain financial ratios at Sept. 30 under its credit agreement and is therefore negotiating with lenders to revise loan covenants, according to a filing with the Securities and Exchange Commission. U.S. Bank is the administrative agent for the credit facility.

"Unless it's a very good Fall, we will be in violation," a company spokesman said. "There's no guarantee that we will and there's no guarantee that we won't."

The company had a bank meeting about two weeks ago at which time the issue of possible non-compliance was raised and resetting covenants was discussed, according to the spokesman.

"We don't anticipate any problems," the spokesman said. "We just have to pay a little cash. Last time it cost us $45,000."

At March 31, the company was in violation of working capital and net worth covenants. In May the consortium of lenders agreed to waive these violations.

"We expect to have this completed by September 30, 2002," the filing said. "If we are unable to have the covenants reset, we may have to renegotiate the loan or enter into a new agreement."

Presently, the company has a $245 million senior secured credit facility that is due in April 2004. At June 30, borrowing availability was $189.6 million, from which $154.3 million had been drawn.

Royster-Clark is a New York, N.Y. producer of fertilizer and crop-protection products.

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