FALL RIVER – Quaker Fabric Corp. (Nasdaq: QFAB) “likely will commence an orderly liquidation of its business and a sale of its assets,” the company announced last night.
The upholstery fabric maker explained that it “has not met the requirements for committed borrowings under its existing lending facilities and, as a result, any advances to the Company by its revolving lenders will only occur on a discretionary basis.”
Meanwhile, Quaker said, it is in talks with its existing lenders and alternative lenders, seeking to raise the financing it will need to conduct an orderly liquidation. That liquidation is not expected to yield “sufficient funds to permit any payment to holders of its common stock,” the company added.
In fact, Quaker said, “There is significant uncertainty as to whether the company will be able to obtain sufficient liquidity from alternative sources to continue its operations after its annual shutdown period, which this year runs from July 2 through July 15.”
It was not immediately clear how Quaker had arrived at this point.
Though the company has struggled to adapt to a marketplace in which it faced increasing competition from China, the past year had seemed to mark a turnaround. Its first-quarter report, issued on April 19, was cautiously optimistic.
“We clearly still have a lot of work to do,” Larry A. Liebenow, Quaker’s president and CEO, wrote in the report, adding: “We are encouraged by the stability that can be seen in our sales over the past three quarters – and by the sequential improvement in our margins over that same time period.”
The company had reduced its debt by about $1 million in the first quarter, Liebenow noted. (READ MORE) At the time, Quaker was looking forward to the closing in late April of the sale of its headquarters building in Fall River, which Rosewood Management had agreed to buy for $4.7 million. It is not clear whether that sale ever occurred.
Calls to Quaker Fabric seeking comment were not immediately returned.
In the PBN’s 2007 Book of Lists, Quaker ranked eight among local manufacturer, along with Sensata Technologies of Attleboro; both of which reported 1,000 employees.
Fall River-based Quaker Fabric Corp. (Nasdaq: QFAB), a maker of woven upholstery fabrics for the U.S. and global furniture markets, is the world’s largest producer of Jacquard-weave upholstery fabric.
