American Apparel Agrees to $90 Million Asset-Based Infusion
August 17 2015 - 7:00PM
Dow Jones News
American Apparel Inc. has reached an agreement with creditors
for a $90 million asset-based infusion, averting default.
Still, the retailer warned Monday a bankruptcy threat remains
given its financial results thus far and its projections for the
next four fiscal quarters.
The retailer had warned last week it had about $13 million of
available cash, roughly the amount of an interest payment due on
Oct. 15—and risked default unless it raised another cash infusion
or refinance its debt.
As of Aug. 11, the retailer said Monday, it was down to $11.2
million in cash.
The company, which has been staving off bankruptcy through a
series of cash infusions, last amended its $50-million line of
credit with Capital One in March, according to regulatory
filings.
A day later, Moody's Investors Service on Wednesday cut American
Apparel's rating to Caa3, nine notches into junk territory, saying
the retailer's financial condition was "untenable."
The amended credit facility matures on April 4, 2018.
The company's stock, which ended the year at $1.03, closed
Monday at 15 cents.
Write to Maria Armental at maria.armental@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 17, 2015 18:45 ET (22:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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