UPDATE 1-American Capital amends agreement with lenders

* Says extends deadline for restructuring credit facility

* Initial deadline to complete restructuring now March 15
* Shares fall 9 pct

Feb 1 (BestGrowthStock) – Debt-laden private-equity lender American
Capital Ltd (ACAS.O: ) said it amended an agreement with lenders
to extend the deadline for restructuring of its credit facility
and other debt arrangements.

Shares of the Bethesda, Maryland-based company dropped more
than 9 percent to $3.34 Monday on Nasdaq, but pared some losses
and were trading down 7 percent at $3.44.

The amendment to the lock-up agreements — which generally
requires the lenders under the credit facility to agree to the
restructuring — extends the initial deadline for completing
the restructuring to March 15, the company said in a regulatory

This date can be further extended to March 31 by agreement
with Wachovia Bank, National Association, as the administrative
agent for the lenders under the credit facility, the company

As per the agreement, if American Capital chooses to file a
prepackaged reorganization case before the restructuring
deadline, the deadline extends to May 15 for the reorganization
plan to be confirmed by the reorganization court, the company
said in a regulatory filing.

On Friday, American Capital said in a proxy statement that
the liquidity crisis could make it difficult for the company
continue to generate significant liquidity through sales of
portfolio investments. [ID:nSGE60S0ME]

The company, which has a significant number of portfolio
companies in various stages of sales process, also said it
expects to enter into a restructuring of unsecured credit and
debit facility shortly.

American Capital had also sought shareholder approval to
sell up to 20 percent of its shares below the net asset value
per share.

Stock Market Advice
(Reporting by Archana Shankar and Anurag Kotoky in Bangalore;
Editing by Unnikrishnan Nair)

UPDATE 1-American Capital amends agreement with lenders