Northstar Aerospace extends forbearance agreement with lenders

By Angela McDaniels

Tacoma, Wash., Feb. 24 - Northstar Aerospace, Inc. said its forbearance agreement with the lenders under its credit facility has been extended to March 23 from Feb. 17.

The lenders agreed to the extension provided that they receive a plan and timeline for the repayment of the secured liabilities or a recapitalization of the company by March 6, according to a company news release.

The company said that it is still exploring and evaluating strategic alternatives and that significant doubt remains about its ability to continue as a going concern.

The forbearance agreement was announced on Feb. 6.

As previously reported, Northstar said it was in violation of its financial covenants as of Jan. 31.

The lender forbearance agreement includes an increase in the interest rate, additional reporting requirements and the appointment of an outside financial adviser to assist with direction and management of financial matters.

The company also reached a forbearance agreement with a major customer after it received a breach of contract notice from the customer. That agreement was scheduled to expire on Feb. 17. After that, the customer will provide three business days of notice of its intent to exercise any rights.

Northstar is a Chicago-based maker of flight critical gears and transmissions.

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