North America based comfort cushioning producer Foamex International Inc announced several significant developments in its efforts to strengthen its balance sheet and enhance long term value while continuing normal business operations.
Foamex LP, Foamex's primary operating subsidiary, has reached an agreement with the agents for its senior lender groups, Bank of America, North America ("Bank of America") and Silver Point Finance, LLC ("Silver Point"), to amend its Credit Agreements. The amendments will provide additional committed liquidity by allowing Foamex to access the remaining proceeds from the sale of its Rubber & Felt businesses for working capital needs and waive certain default provisions in the agreements.
Foamex is also engaged in discussions with representatives of an ad hoc committee representing a significant majority, in amount, of its Senior Secured Notes due 2009, as well as holders of a majority, in amount, of its Senior Subordinated Notes due August 15, 2005 and in 2007.
The amendments to the senior lender credit agreements waive certain default provisions in order to provide adequate time for the Company to continue these ongoing negotiations. These discussions relate to a possible conversion of a substantial portion of the Company's indebtedness into equity.
In addition, in consideration of its best long-term interest, Foamex will not make the $51.6 million principal payment on its 13 1/2 percent Senior Subordinated Notes that mature today.