Maxxam unit Pacific Lumber amends loan agreements to borrow extra $3 million

By Caroline Salls

Pittsburgh, Jan. 26 - Maxxam Inc. indirect wholly owned subsidiary The Pacific Lumber Co. and its subsidiary Britt Lumber Co. Inc. entered into an amendment to their revolving credit and term loan agreements that allows Maxxam to make up to $3 million of additional loans, according to an 8-K filing with the Securities and Exchange Commission.

Proceeds are expected to be used for working capital.

According to the filing, an event of default exists under the loan agreements because of a breach of an EBITDA covenant for the period ended Nov. 30. A further breach may occur for the period ended Dec. 31.

Pacific Lumber, a Scotia, Calif.-based timber company, said it is in discussions with the lenders to change the covenant and resolve the default.

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