Specialty apparel retailer Eddie Bauer Holdings Inc
A going-concern opinion means the auditors cannot have reasonable assurances that a company will survive for the next fiscal period.
Eddie Bauer submitted two previous proposals to its amended term loan lenders, both of which were not approved, before reaching an agreement in principle on the current amendment terms.
The amendment terms being discussed include upfront cash and payment-in-kind fees, a substantial increase in interest rates, as well as the issuance of warrants for its stock.
The company, which announced job cuts in January, reported a 5.7 percent decline in fourth-quarter revenue. It has closed 24 retail and five outlet stores in 2008.
We expect 2009 to be a very challenging, difficult year. While the amendment we are seeking is expensive, it will give us a new level of covenants with considerably more room on the downside through the first quarter of 2010, CEO Neil Fiske said in a statement.
Eddie Bauer is an iconic U.S. clothing brand that targets people with a love for sports and the outdoors. Its founder with the same name opened the company's first store in Seattle in 1920.
Its shares closed at 78 cents Wednesday on Nasdaq. They have lost 90 percent of their value in the last six months.
(Reporting by S. John Tilak in Bangalore)