is ISLE having cash flow issues and 1.2 billion debt EBITA violations?
COULD THIS HAPPEN:
"As a result of decreased EBITA, it is no longer feasible for the company to service over $1.2 billion of debt," Isle of Capri said in the filing.
Islee of Capri reached an agreement with its senior lenders to amend and extend the terms of its current senior financing to reduce the company's debt and improve its capital structure.
Isle of Capri said at that time the debt restructuring would best be implemented through a "prepackaged" Chapter 11 filing, which had the support of the company's senior lenders. In a prepackaged bankruptcy, management negotiates the general terms of a bankruptcy plan with major creditors prior to the filing.
The company estimated its annual EBITDA (earnings before interest, tax, depreciation and amortization) would fall to a lower range due mainly to problems generating sufficient cash.
"As a result, it is no longer feasible for the company to service over $1.2 billion of debt," Isle of Capri said in the filing.
The company said it agreed with its senior secured lenders on a plan that would reduce its long-term debt from a current balance of about $1.2 billion to "no more than $600 million."
Following the restructuring, which is subject to court approval, holders of subordinated notes will hold about 92.5 percent of the total equity interests in reorganized Isle of Capri, according to the filing.