USA: Worldtex Obtains New Credit Facility

Worldtex, Inc (NYSE: WTX) said that it had entered into a new $47.5m credit facility with Bank of America Commercial Finance - Business Credit. The facility provides for revolving credit of up to $40m, with loan availability determined under a "borrowing base" formula derived from Worldtex's domestic accounts receivable and inventory as most recently calculated at the time of borrowing. The facility also provides for a term loan of $7.5m, $3m of which has been borrowed and $4.5m is expected to be borrowed within 60 days upon the satisfaction of certain conditions. Worldtex has used approximately $20m of new borrowings under the facility to repay its existing domestic credit facility and to pay transaction expenses. Additional availability will be used for Worldtex's working capital needs and general corporate business purposes. Worldtex also said that it had engaged the investment banking firm Houlihan Lokey Howard & Zukin Capital as investment banker to study various strategic alternatives for the company. With current annual revenues of nearly $300m, Worldtex, Inc is a market leader in the covered elastic yarn and narrow elastic fabric markets throughout the Americas and Europe. Worldtex, Inc supplies a broad range of component products to the apparel, textile, home furnishings and specialty end-use markets.