Activewear maker Delta Apparel Inc is to sell its yarn manufacturing plant in Edgefield, South Carolina to Parkdale America LLC for an undisclosed sum.

As part of the deal, which is due to be completed at the end of December, Parkdale will supply Delta Apparel's yarn requirements for the next five years.

Robert W Humphreys, Delta Apparel's president and CEO, said: "Over the past year, we have been evaluating our long-term yarn supply options and believe this strategy accomplishes our goals.

"The transaction will allow us to reduce our working capital investment and eliminate our need for future capital expenditures in yarn manufacturing.

"The supply agreement with Parkdale allows us to acquire yarn that has been manufactured from the most modern equipment available.

"We expect to use the proceeds from the sale of the plant and the reduction in working capital needs to reduce our debt and continue our investment in our marketing and distribution strategies that should grow our overall business."

Delta Apparel has operations in the United States, Honduras, Mexico and Costa Rica and employs around 4,500 people worldwide.