Date set for Pacific Sunwear's Nasdaq de-listing
Struggling teen action sports and lifestyle retailer Pacific Sunwear of California will be de-listed from the Nasdaq Stock Market on 15 July following several warnings over its stock price.
In a filing to the stock exchange, the company said the de-listing will be effective from 15 July. It follows a second warning letter in March about its shares trading below the required US$1 minimum at least once during the course of a 30-day period.
The decision to de-list Pacific Sunwear was based on a review of information provided by the company to Nasdaq, the exchange said. The company was notified of the determination on 1 March, after which, Pacific Sunwear appealed to a hearing panel. On 12 April, the company withdrew its request for an appeal just days after filing for Chapter 11 bankruptcy protection in a bid to lower its long-term debt and reduce costs.
The filing came as the company also said it had secured a debt-for-equity restructuring agreement with Golden Gate Capital, which converted more than 65% of Pacific Sunwear's debt into equity of the reorganised company. It is set to provide at least $20m in additional capital once it emerges from Chapter 11.
Meanwhile, Wells Fargo Bank said it would provide a $100m in debtor-in-possession (DIP), allowing the company to draw capital as needed to manage seasonal swings in cash flow. It also committed to offering a five-year $100m revolving line of credit once Pacific Sunwear emerges from Chapter 11.
The news came as the company revealed a narrowing of its net loss to $10m for the three months to 30 January, from a loss of $26m in the prior year, thanks to a non-cash gain of $200,000. Net sales climbed 0.6% to $232.9m, while comparable store sales edged up 0.2%.
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