US: American Apparel investors to offload shares
A group of private investors is looking to sell its shares in American Apparel, just months after giving the troubled chain a US$15m lifeline.
The investors, led by Canadian financier Michael Serruya and Delavaco Capital, are seeking to sell the 43.2m shares in a secondary offering, which means that American Apparel will not get any proceeds from the sale, according to an SEC filing on Monday (29 August).
The group bought 15.8m shares for $0.9 a share in April, and had the option to buy a further 27.4m shares for the same price over a six-month period.
According to reports, billionaire Ron Burkle is in discussions with the company to refinance a portion of its $160m debt load. The New York Post said he is backing an offer from Colbeck Capital, an affiliate of his Yucaipa investment vehicle, which is looking to take over a $75m credit line, currently provided by Bank of America.
There have also been reports that Leonard Green and Partners recently offered American Apparel a $100m loan for its name and intellectual property. The money would be used to pay off private-equity firm Lion Capital, which the retailer owes $83.8m and whose punishing 18% interest rate has sapped its liquidity.
Yucaipa Companies and Leonard Green & Partners have not yet responded to requests for comment.
Shares in American Apparel were up 4.3% to $0.97 a share at the market's close yesterday (30 August).
- PSF 2014: No one size fits all in apparel sourcing
- PSF 2014: Shifting focus from cost to consumer
- Garment manufacturers eye Myanmar outsourcing
- Bangladesh industry development moving backwards
- Teen retail being rocked by fast fashion headwinds
- Adidas China supplier in discussions over strike
- Gap issues mirror widespread industry challenges
- Bangladesh PM asks clothing buyers to pay more
- H&M "pushing the process" on sustainable fashion
- Adidas plans mobile phone hotline at all suppliers
- Ethiopia – the emerging textile and clothing industry
- Antimicrobial fibres, fabrics and apparel: innovative weapons against infection
- Trade and trade policy: clothing imports, consumer expenditure and trends in five emerging markets: Brazil, Colombia, India, Kazakhstan and Peru, 4th quarter 2013
- Sustainable Textiles for Apparel: Fact, Fiction and Future Prospects
- Jeans in Italy