Business News

Nebraska Book Company Seeks Changes to Credit Agreement

Thursday 08. January 2009 - Nebraska Book Company, Inc., a Kansas corporation (the "Company"), today announced its intention to seek amendments to extend the term of its Revolving Credit Facility (the "Revolver") under its current Senior Credit Facility and to amend certain financial ratios and definitions under the Senior Credit Facility.

The Company is seeking to extend the Revolver for approximately 15 months past its current expiration date of March 4, 2009. The Company also announced that in connection with the extension and amendments, its majority equity holder, Weston Presidio would invest approximately $10 million into the Company.

Among other things, the amendment is expected to decrease the maximum borrowing capacity under the Revolver to $65 million, add to current limitations on the Company’s ability to acquire additional bookstores, increase the interest cost associated with the Senior Credit Facility and provide for the payment of additional fees associated with the extension and amendment.

The Company is seeking the changes in order to continue to utilize the Revolver for working capital purposes beyond its current expiration date. The Company has historically used the Revolver to fund peak working capital requirements of its business, including additional working capital investments for its expanding chain of retail college bookstores across the country.

Mark Oppegard, Nebraska Book Company’s CEO, said, “We have a long history of executing on our business model and it’s important to note that we remain optimistic about the college bookstore business — but we also recognize that the historic disruption of the credit markets and the general economic slowdown means that we need to look hard at everything we do. While the proposed changes will increase our interest costs, it will also provide us the necessary flexibility and working capital to continue to operate our business in a manner that is conducive to the goals of long-term revenue and EBITDA growth.”