American Apparel to amend credit agreements with Bank of America, Lion

By Devika Patel

Knoxville, Tenn., April 26 - American Apparel, Inc. said it is in discussions with its lenders to amend its credit agreements with Bank of America and Lion Capital.

Among other things, the amendments are expected to increase the minimum excess availability requirement to $12.5 million from $7.5 million and expand Lion's anti-dilution protections regarding its warrants. The amendments also are expected to waive the requirement that the year-end audit for fiscal year 2010 be provided without a "going concern" or similar qualification.

The company also said it plans a private placement of stock, which will raise $14.9 million. The deal has a greenshoe for $26.1 million. The company will sell about 16.6 million common shares at $0.90 per share. The per-share price is a 43.04% discount to $1.58, the April 25 closing share price.

Investors include company chief executive Dov Charney, as well as Michael Serruya and Delavaco Capital.

Proceeds will allow the company to take advantage of improving business conditions, while at the same time meeting increased bank required reserves.

American Apparel is a Los Angeles-based manufacturer, distributor and retailer of branded fashion basic apparel.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.