LodgeNet (LNET) Lenders Grant Forbearance
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LodgeNet Interactive Corporation (Nasdaq: LNET) today announced that it has reached a forbearance agreement regarding its credit agreement with lenders holding a majority of the loans. This agreement advances the Company's ongoing process, as announced on August 21, 2012, of working with its financial advisors and lenders to address its capital structure and liquidity needs and implement a long term strategic solution that best positions the Company for the future.
In connection with the forbearance agreement, the Company's lenders have agreed to not exercise their rights, up to and through December 17, 2012, primarily with respect to the Company's breach of its leverage covenant under the Credit Facility. Principal and interest due under the Credit Facility on September 30, 2012 were paid.
In light of the forbearance agreement and the Company's need to manage its liquidity, it has deferred the payment of the preferred dividend scheduled to be paid on October 15, 2012 on its 10% Series B cumulative perpetual convertible shares, enhancing its financial flexibility as it works on a comprehensive solution to strengthen its balance sheet. The deferred dividend that was scheduled to be paid on October 15, 2012 in the amount of $1.4 million will accrue in accordance with the terms of the Preferred Stock.
Due to the ongoing nature of the Company's discussions with its lenders and consideration of strategic alternatives, the Company will not hold a third quarter 2012 quarterly earnings call. The Company expects to file its third quarter 2012 results on Form 10-Q with the Securities and Exchange Commission on or before November 9, 2012.
In connection with the forbearance agreement, the Company's lenders have agreed to not exercise their rights, up to and through December 17, 2012, primarily with respect to the Company's breach of its leverage covenant under the Credit Facility. Principal and interest due under the Credit Facility on September 30, 2012 were paid.
In light of the forbearance agreement and the Company's need to manage its liquidity, it has deferred the payment of the preferred dividend scheduled to be paid on October 15, 2012 on its 10% Series B cumulative perpetual convertible shares, enhancing its financial flexibility as it works on a comprehensive solution to strengthen its balance sheet. The deferred dividend that was scheduled to be paid on October 15, 2012 in the amount of $1.4 million will accrue in accordance with the terms of the Preferred Stock.
Due to the ongoing nature of the Company's discussions with its lenders and consideration of strategic alternatives, the Company will not hold a third quarter 2012 quarterly earnings call. The Company expects to file its third quarter 2012 results on Form 10-Q with the Securities and Exchange Commission on or before November 9, 2012.
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