Medical Staffing Network Holdings got some breathing room from its lenders, but the company still warned that a Chapter 11 filing was possible if it cant restructure its debt.
The Boca Raton-based nurse staffing company disclosed in a Securities and Exchange Commission filing on Monday that its lenders, led by General Electric Capital Corp., gave it until June 30 before taking action on its defaulted loans. This is the second forbearance term. The first was set to expire around the time the new agreement was signed.
The agreement also increased the amount the lenders can give cash-strapped Medical Staffing in revolving loans to meet its liquidity needs from $5 million to $7 million. The company owns these first lien lenders about $82 million.
It is also in default on a $25.4 million second lien credit agreement, but those lenders dont have the authority to act on a default before General Electrics lending group.
Medical Staffing lost $6.7 million on revenue of $72 million in the first quarter. It had just $3.1 million in cash and equivalents as of March 31.
Medical Staffing shares closed Monday at 4.8 cents. The 52-week high was 72 cents on Nov. 16. The 52-week low was 4 cents on June 1.