USA: Kasper A.S.L To Restructure Financial Obligations
Kasper A.S.L, Ltd. (Nasdaq:KASP) announced today that it will not make its September 30, 2000 semi-annual interest payment of approximately $7.2m to holders of its 13 per cent Senior Notes. The company said that it is engaged in discussions with certain of its noteholders to formulate a financial restructuring that will address current liquidity issues and enhance the company's short- and long-term ability to pursue its strategic plans, including development of the Anne Klein brand and follow-up to its successful rollout of the fall Anne Klein2 line, launched this summer. Costs associated with the fall launch of the company's new Anne Klein2 line, which first shipped in July, together with a difficult Spring season for the Anne Klein bridge and Kasper products shipped in that season, have impacted current liquidity and require that the company address its capital structure to reach its business goals. The company emphasized that it is current with all of its other payment obligations to its banks and vendors, and expects to remain so. Arthur S. Levine, chairman and chief executive officer, said: "Strong reception of our new Anne Klein2 brand at retail, and planned shipments by the company in July, August and September in the midst of what has been a sluggish department store environment, continue to give us confidence in the direction of our business. We have also weathered the trend toward more casual looks and are seeing a resurgence in our Kasper A.S.L. suit line, which is our company's core business. The company and its financial advisors are exploring all alternatives for restructuring our debt obligations." The company also said today that it is not in compliance with certain financial covenants under its Credit Facility with a group of financial institutions led by Chase Manhattan Bank and that the company is meeting with those lenders to discuss appropriate modifications to its loan agreements.
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