Wilsons The Leather Experts enters into new $180 million revolver

By Sara Rosenberg

New York, April 26 - Wilsons The Leather Experts Inc. entered into a new $180 million revolving credit facility provided by GE Capital/Commercial Finance, CIT, Wells Fargo, LaSalle and US Bank, according to a company press release. In addition, the Brooklyn Park, Minn. leather retailer received a $25 million term loan from GE Capital.

In order to be able to utilize the line of credit, the company must raise $10 million through debt or equity financing or a sale-leaseback. According to the release, Wilsons expects to satisfy this requirement by the first week of May. In another press release on Friday, Wilsons announced that it has entered into a definitive common stock purchase agreement for the sale in a private placement of up to 900,000 shares of newly issued common stock to two investors. The purchase price is $11 per share and will result in net proceeds of approximately $9.9 million. The sale is expected to close within one week.

The revolver and the term loan mature in June 2005. The loans are secured by a security interest in and lien upon all existing and after-acquired personal property other than Equipment and Fixtures and a first priority perfected lien and mortgage upon certain real estate of Bermans and Bentley, according to a company filing with the Securities and Exchange Commission. Proceeds will be used for working capital needs.

Interest on the revolver is either Libor plus 275 basis points or prime plus 150 basis points, at Wilson's option. It also has a 37.5 basis points non-use fee. The term loan B is at prime plus 400 basis points.

"This new agreement fulfills our expected working capital requirements for the foreseeable future," said Joel Waller, chief executive officer, in the news release. "As a seasonal business, strong working relationships with our commercial banking group has always been an important focus for us. We are pleased with the agreement and the flexibility it provides us as we look to first rebuild our operating profitability and then resume growth in our store base."

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