New World Pasta gets credit facility amendment

By Jeff Pines

Washington, Oct. 25 - New World Pasta Co. obtained court approval for its proposed amendment to its credit facility with Black Diamond Commercial Finance LLC.

The order was filed Friday with the U.S. Bankruptcy Court for the Middle District of Pennsylvania.

Under the amendment, net sale proceeds will go to repaying the facility, with three exceptions: the proceeds from inventory sales in the course of normal business, proceeds from the sale of equipment and real estate in Louisville, Ky., and Lethbridge, Canada, in an amount of not more than $2 million, and additional asset sales not to exceed $500,000.

Mandatory prepayments will go to repay fees first, then to interest due on advances, then to the principal on advances, then to repaying letters of credit, then to all other obligations, and finally to pay the escrow account.

The amendment also caps restructuring expenses at milestones, including $10.57 million for the period of May 30 to Nov. 27 and up to $19 million from May 30 to May 31, 2005.

Harrisburg, Pa.-based New World Pasta filed for bankruptcy on May 10. Its Chapter 11 case number is 04-02817.

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