Diamond Foods Agrees to Higher Interest Rates and Halts Dividend
Diamond Foods Inc. (DMND), the maker of Emerald snack nuts and Kettle Chips, reached an agreement with its lenders to keep its credit line open until June 18 in exchange for paying higher interest rates.
Diamond announced the forbearance agreement today in a regulatory filing. The San Francisco-based company said it will be charged 75 basis points more on its credit line, pay a one- time fee of 25 basis points and suspend dividend payments to stockholders. A basis point is one-hundredth of a percentage point.
Agreeing to accept the new terms on its credit line kept creditors from declaring all balances due and payable immediately, the company said in the filing.
Diamond is restructuring its debt after its February announcement that it had reported some costs for walnuts in the wrong quarters violated some covenants. The company replaced its chief executive officer and chief financial officer, and an agreement to buy Pringles potato chips from Procter & Gamble Co. was lost.
Diamond was little changed in extended trading after the announcement. The shares had risen 2.4 percent to $25.64 at the regular New York close.
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