Compass Diversified Holdings (NYSE: CODI) has announced a significant extension of its forbearance agreement with its lender group, now set to last until October 24, 2025. This development comes as part of the company’s ongoing efforts to address and rectify financial and accounting irregularities discovered at its subsidiary, Lugano Holdings, Inc. The agreement not only extends the forbearance period but also increases the company’s access to its $100 million revolving credit facility from $40 million to $60 million during this time.

The initial forbearance agreement was established on May 22, 2025, following the uncovering of irregularities in Lugano’s financing, accounting, and inventory practices. Compass Diversified has emphasized that the investigation is proceeding as expected and is confined to Lugano, with no impact on its eight other subsidiaries. These subsidiaries continue to operate normally, contributing to the company’s overall financial health and cash flow generation.

Elias Sabo, CEO of CODI, highlighted the company’s solid liquidity position and the importance of the increased access to capital through the revolving credit facility. Sabo also expressed appreciation for the support from banking partners and bondholders during this period, underscoring the company’s commitment to maximizing value for all stakeholders. The extension of the forbearance agreement and the increased credit facility access are critical steps as Compass Diversified works towards completing its investigation and finalizing necessary financial restatements.

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