Worldtex Inc has announced that it would pay its trade creditors on ordinary terms during the pendency of its Chapter 11 bankruptcy case.

Worldtex has said that it has received Bankruptcy Court approval to pay amounts due to Worldtex's trade creditors arising prior to the filing of its Chapter 11 bankruptcy case, which ordinarily would be stayed during the pendency of the bankruptcy proceedings.

Amounts payable to trade creditors arising after commencement of the Chapter 11 case will also be paid as they come due.

In addition, the Bankruptcy Court gave final approval of the company's debtor in possession loan agreement, which provides financing during pendency of the Chapter 11 case, and scheduled a hearing for May 30, 2001, to consider the disclosure statement relating to Worldtex's plan of reorganisation.

Barry D Setzer, chairman of Worldtex, said: "We are pleased that we will be able to continue our normal business operations and pay our trade creditors on customary terms while we implement our capital restructuring under the Bankruptcy Code. In addition, given the schedule currently contemplated by the Bankruptcy Court, we expect to complete our reorganisation by early this summer."

Consummation of Worldtex's Chapter 11 plan of reorganisation requires, among other things, arranging a new credit facility to be available upon emergence from Chapter 11 and Bankruptcy Court approval of the plan and the disclosure statement describing the plan.