Orchids Paper Products Gets Lender Consent

Orchids Paper Products said it and its lenders have agreed to amend their credit agreement to, among other things, strike the fixed charge coverage for the period ended June 30 and waive the cash reserve requirement, the company said late Wednesday.

The company said it is currently exploring refinancing of some or all of its current outstanding indebtedness to increase financial flexibility and create greater available liquidity. “We continue to be confident that the completion of the Barnwell, South Carolina mill and the increase in sales resulting from the announced new business, both of which occurred in June, bode well for Orchids’ forward-looking prospects, and the expected growth in earnings we believe will bring our financial leverage measures back in line over the subsequent periods,” CEO Jeff Schoen said in a statement. “In the meantime, debt refinancing alternatives will be considered to meet liquidity requirements which we anticipate would minimize any long-term dilution of shareholders.”

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