Edmonton-based organic and natural food retail firm Planet Organic Health has gained two months’ grace from its lenders while it tries to renegotiate its loans.
The company announced Monday it’s reached a forbearance agreement with TD Bank and New York-based financier Ares Capital Corp., in which the two lenders will hold off for 60 days on “enforcing their rights and remedies with respect to credit defaults.”
Planet Organic operates 10 Planet Organic Market natural food supermarkets in Canada, 11 Mrs. Green’s Natural Markets outlets in the U.S., 43 Sangster’s Health Centre shops, seven Healthy’s shops and natural supplement firm Trophic Canada.
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The company, which trades on the TSX Venture Exchange, added that there’s “no certainty” of being able to come to satisfactory terms in negotiating for revised loan covenants.
If an agreement can’t be reached, Planet Organic said it would be “forced to seek financing from other sources” if its lenders call in their loans and demand repayment once its 60 days are up.
The company announced last month that it’s in default on its debt facilities and is considering selling off “certain non-core assets” to pare back an aggregate debt load of about $39.3 million as of Sept. 16.
