(Reuters) – Debt-laden private-equity lender American Capital Ltd (ACAS.O) said it amended an agreement with lenders to extend the deadline for restructuring of its credit facility and other debt arrangements.
Shares of the Bethesda, Maryland-based company dropped more than 9 percent to $3.34 Monday on Nasdaq, but pared some losses and were trading down 7 percent at $3.44.
The amendment to the lock-up agreements — which generally requires the lenders under the credit facility to agree to the restructuring — extends the initial deadline for completing the restructuring to March 15, the company said in a regulatory filing.
This date can be further extended to March 31 by agreement with Wachovia Bank, National Association, as the administrative agent for the lenders under the credit facility, the company said.
As per the agreement, if American Capital chooses to file a prepackaged reorganization case before the restructuring deadline, the deadline extends to May 15 for the reorganization plan to be confirmed by the reorganization court, the company said in a regulatory filing.
On Friday, American Capital said in a proxy statement that the liquidity crisis could make it difficult for the company to continue to generate significant liquidity through sales of portfolio investments.
The company, which has a significant number of portfolio companies in various stages of sales process, also said it expects to enter into a restructuring of unsecured credit and debit facility shortly.
American Capital had also sought shareholder approval to sell up to 20 percent of its shares below the net asset value per share. (Reporting by Archana Shankar and Anurag Kotoky in Bangalore; Editing by Unnikrishnan Nair)