September 12, 2011 / 12:47 PM / 7 years ago

UPDATE 2-Arctic Glacier denied extensions on covenant waivers

* Two lenders have refused to extend covenant waivers

* Previous waivers expired September 9

* The two lenders have issued a notice of default (Adds bullets, background from fifth paragraph)

TORONTO, Sept 12 (Reuters) - Debt-laden packaged ice maker Arctic Glacier Income Fund AG_u.TO said on Monday two of its secured lenders have refused to extend waivers on certain credit facilities and issued notices of default.

The Winnipeg, Manitoba-based group in August had said its ability to continue as a going concern was dependent upon successfully negotiating longer-term covenant relief with its lenders. [ID:nL3E7JC2L3]

“The fund’s second-lien secured lenders, CPPIB Credit Investments Inc and West Face Capital Inc, have refused to provide a further extension of the period during which they have waived compliance with certain financial covenants,” the company said in its statement on Monday.

Arctic Glacier said the move may compel other secured lenders to take similar steps.

The fund has struggled since 2008, when it said its U.S. operating subsidiary, Arctic Glacier International Inc, was being investigated by the U.S. Department of Justice.

In 2009 that subsidiary pleaded guilty to conspiring with competitors to divide up the packaged ice market in part of Michigan.

Arctic Glacier paid a $9 million fine, and has agreed to multi-million dollar settlements with purchasers in the United States and Canada.

The fund is also the target of a landmark shareholder class action lawsuit. [nN1E76I0T3]

Arctic Glacier said it was still having active discussions with lenders to amend terms of the credit agreements for future quarters. But there is no assurance that such amendments will be approved, the company warned. (Reporting by Euan Rocha and Allison Martell; Editing by Frank McGurty)

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