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American Apparel Delays Annual Report to Rework Lending Agreement

American Apparel Inc. delayed the filing of its annual financial report as it reworks a lending agreement to allow it to take on more debt provided by a hedge fund.
Source: American Apparel
By
  • Bloomberg

NEW YORK, Unites States — American Apparel Inc. delayed the filing of its annual financial report as it reworks a lending agreement to allow it to take on more debt provided by a hedge fund.

Discussions are continuing with Capital One Financial Corp. to change the terms of a credit facility and allow a $15 million loan from Standard General, the Los Angeles-based retailer said today in a filing. Standard General agreed to a $25 million capital commitment last year in exchange for board seats, and used the first $10 million to buy an American Apparel loan.

The retailer, which is in a battle with ousted founder Dov Charney, reported some estimated annual results in the filing. Sales fell about 3.9 percent to $609 million. That would imply revenue fell 9.2 percent to $153.6 million during the fourth quarter, the steepest quarterly drop in four years.

American Apparel rose 1.2 percent to 77 cents today in New York. The shares have declined 25 percent this year.

The retailer estimated that its annual net loss shrank to $69 million, or 43 cents a share, from $106 million, or 96 cents, a year earlier.

The chain, which has raised money multiple times in the past few years, said it had $8 million in cash at the end of last year and $13 million of borrowing capacity under the facility with Capital One. By March 13, the available capacity declined to $6 million.

The $15 million from Standard General will be used to make a debt payment. On April 15, the company owes about $14 million of interest on its bonds.

By: Matt Townsend; editors: Nick Turner, Kevin Orland and James Callan.

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