Worldtex Inc (OTC Bulletin Board: WTXI), the supplier of covered elastic yarn and narrow elastic fabric, has failed to make the $8.4 million interest payment due today on its 9-5/8 % Senior Notes.

The company has said that it will take advantage of the 30-day grace period permitted under the indenture governing the Senior Notes. It will use this time to continue discussions with an unofficial committee of creditors with a view to a potential restructuring of Worldtex's capitalisation.

Barry D Setzer, chairman and chief executive officer of Worldtex, said: "We are very pleased with the current status of negotiations, as everyone has demonstrated a desire for a quick resolution of this financial restructuring effort.

"We are optimistic that the company and the committee will be able to agree in the very near-term to a consensual transaction that will provide an appropriate capital structure for Worldtex without interrupting the day-to-day business of the company.

"We appreciate the continued support of our employees, customers, vendors, bank lenders and noteholders."

Rob Hamwee, a managing director of GSC Partners, the largest holder of Worldtex's 9-5/8 % Senior Notes added: "The committee is enthusiastic about the progress that we have made in our discussions with the company regarding the proposed restructuring of Worldtex's capitalisation. We believe the prospects to be good for a prompt agreement and successful implementation of a restructuring plan."