US: American Apparel buoyed by new investment
Shares in US retailer American Apparel have risen after news of an amended credit agreement and that business magnate Ronald Burkle has bought a 6% stake in the firm.
The apparel retailer, which said in a trading statement last month it may struggle to comply with terms of the existing loan, has filed an Securities and Exchange Commission (SEC) form to announce a new deal with lender Lion/Hollywood.
Under the new deal its interest rate payable under the Lion Credit Agreement will rise from 15% to 17% per annum.
Burkle has acquired the shares because he believes they are undervalued by the market at the time they were acquired, an SEC filing said.
The news could arrest American Apparel's fears about "additional sources of liquidity required to continue operations", and sent shares up 6% on the New York Stock Exchange (NYSE) today (25 June).
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