Diamond Foods reaches agreement with its lenders to amend its credit agreement, will have continued access to its existing revolving credit facility through June 18; company required to suspend dividend payments to stockholders
March 21, 2012
– Diamond Foods, Inc. (Nasdaq:DMND - News) ("Diamond") today announced the Company has reached an agreement with its lenders to amend its credit agreement. Under the amended agreement ("amendment"), Diamond, working with its current bank group, will have continued access to its existing revolving credit facility through June 18, 2012 subject to Diamond's compliance with the terms and conditions of the amendment. During this period, Diamond will continue to make scheduled term loan payments. Also, Diamond continues to make progress with its restatement and is pursuing actions with its financial advisor, Dean Bradley Osborne, to explore capital alternatives to strengthen the Company's balance sheet.
"I am pleased to have reached this agreement with our lender group," said Rick Wolford, Diamond's Interim President and Chief Executive Officer. "This agreement enables Diamond to continue to work through our restatement process and with our financial advisor to develop capital alternatives to strengthen Diamond's balance sheet and reduce leverage. Also, during this period, Diamond will continue working to rebuild our walnut grower relationships, to take steps required to ensure Diamond's competitiveness and ongoing success in the walnut industry and, importantly, to continue to successfully support the growth of our snack brands."
The amendment requires Diamond to suspend dividend payments to stockholders. The interest rate on borrowings under the facility will increase by 75 basis points. In addition, Diamond has agreed to pay a one-time forbearance fee of 25 basis points to its lenders.
Diamond Foods is an innovative packaged food company focused on building, acquiring and energizing brands including Kettle(R) Chips, Emerald(R) snack nuts, Pop Secret(R) popcorn, and Diamond of California(R) nuts. Diamond's products are distributed in a wide range of stores where snacks and culinary nuts are sold. For more information visit our corporate web site: www.diamondfoods.com.