Hanover Direct Announces Agreements With Chelsey Direct, LLC to Enter Into a Junior Secured Term Loan Facility and With Congress
17 Junho 2004 - 6:15PM
PR Newswire (US)
Hanover Direct Announces Agreements With Chelsey Direct, LLC to
Enter Into a Junior Secured Term Loan Facility and With Congress
Financial Corporation to Amend Its Senior Credit Facility
EDGEWATER, N.J., June 17 /PRNewswire-FirstCall/ -- Hanover Direct,
Inc. (AMEX:HNV) today announced that it has received a commitment
letter from its controlling shareholder, Chelsey Direct, LLC, for a
junior secured loan of $20,000,000 and reached an agreement in
principle with its senior secured lender, Congress Financial
Corporation, to amend the existing senior credit facility.
Together, the arrangements will increase the Company's liquidity by
approximately $25,000,000. Pursuant to the commitment letter,
Chelsey Direct has committed to lend the Company and its
subsidiaries, on a junior secured basis, $20,000,000 for a
three-year term from the date of closing, subject to earlier
maturity upon the occurrence of a change in control or sale of the
Company. Subject to shareholder approval, in consideration for
providing the loan, Chelsey Direct will receive warrants to
purchase 30% of the fully diluted shares of common stock of the
Company at an exercise price of $.01 per share. Pending shareholder
approval, Chelsey Direct will receive a warrant to purchase a newly
issued series of nonvoting preferred stock that will be
automatically exchanged for the common stock warrants upon receipt
of shareholder approval. Chelsey Direct will also receive certain
other customary fees. Closing of the Chelsey Direct term loan is
subject to the closing of the amended and restated Congress credit
facility. The terms of the Chelsey Direct loan have been approved
by the Company's Audit Committee, all of whose members are
independent, and the Company's Board of Directors. Pursuant to an
agreement in principle with Congress Financial Corporation, the
Company's existing credit facility with Congress will be amended
and restated. The amended and restated credit facility will consist
of approximately $39,974,000, representing a revolving credit
facility of $34,500,000, and a term loan facility of approximately
$5,474,000, representing the existing Tranche A term loan. The
existing Tranche B term loan of approximately $5.1 million will be
paid in full from proceeds of the Chelsey Direct term loan. In
addition, advance rates in the amended and restated facility will
be higher than those under the existing facility, and certain
blocks on advances will be removed, increasing the amount the
Company will be able to borrow under the amended and restated
revolving credit facility. The amended and restated credit facility
will have a three-year term, will be secured by the same collateral
as the existing credit facility, and will be senior to the Chelsey
Direct term loan. Closing of the amended and restated credit
facility is subject to the closing of the Chelsey Direct term loan.
The total increase in potential available capital from these
agreements will be approximately $29,000,000 after the repayment of
the Company's existing Tranche B term loan with Congress, with an
immediate increase in liquidity upon closing of approximately
$25,000,000. The proceeds from these financing transactions will be
used for the Company's ongoing working capital needs. "The capital
infusion will substantially enhance the Company's working capital
position, increase inventory levels and fill rates and reduce back
order levels as well as provide it with the resources necessary to
invest in the Company's core businesses and satisfy demand for its
products," stated Wayne Garten, the Company's President and Chief
Executive Officer. The financing transactions contemplated by the
commitment letter with Chelsey Direct and the agreement in
principle with Congress are subject to the negotiation, execution
and delivery of definitive documentation satisfactory to Chelsey
Direct and Congress, including an intercreditor between Chelsey
Direct and Congress, and the absence of any material adverse change
in the business, financial condition, prospects, profitability,
assets or operations of the Company. There can be no assurance that
the transactions with Chelsey Direct and Congress will be completed
as contemplated, or at all. Separately, the Company announced that
it has notified the American Stock Exchange (the "Exchange") that
it intends to submit a plan to the Exchange by June 22, 2004 to
address the letter it received from the Exchange notifying the
Company that a review of the Company's Form 10-K for the period
ended December 27, 2003 indicated that the Company does not meet
certain of the Exchange's continuing listing standards as set forth
in Part 10 of the Exchange's Company Guide. There can be no
assurance that the Exchange will accept the Company's plan, or that
the Company will be able to maintain the listing of the Company's
common stock on the Exchange. Further, the Company announced that
it tentatively intends to hold its 2004 Annual Meeting of
Shareholders on Thursday, July 29, 2004 at 9:30 a.m. at the
Sheraton Suites on the Hudson, 500 Harbor Boulevard, Weehawken, New
Jersey. All shareholders at the close of business on Friday, June
4, 2004 are cordially invited to attend. About Hanover Direct, Inc.
Hanover Direct, Inc. (AMEX:HNV) and its business units provide
quality, branded merchandise through a portfolio of catalogs and
e-commerce platforms to consumers, as well as a comprehensive range
of Internet, e-commerce, and fulfillment services to businesses.
The Company's catalog and Internet portfolio of home fashions,
apparel and gift brands include Domestications, The Company Store,
Company Kids, Silhouettes, International Male, Scandia Down, and
Gump's By Mail. The Company owns Gump's, a retail store based in
San Francisco. Each brand can be accessed on the Internet
individually by name. Keystone Internet Services, LLC
(http://www.keystoneinternet.com/), the Company's third party
fulfillment operation, also provides the logistical, IT and
fulfillment needs of the Company's catalogs and web sites.
Information on Hanover Direct, including each of its subsidiaries,
can be accessed on the Internet at http://www.hanoverdirect.com/.
DATASOURCE: Hanover Direct, Inc. CONTACT: Charles Blue, S.V.P.
& Chief Financial Officer of Hanover Direct, Inc.,
+1-201-272-3389; or Rich Tauberman of MWW Group, +1-201-507-9500,
for Hanover Direct, Inc. Web site: http://www.hanoverdirect.com/
http://www.keystoneinternet.com/
Copyright
Hanover Direct (AMEX:HNV)
Gráfico Histórico do Ativo
De Ago 2024 até Set 2024
Hanover Direct (AMEX:HNV)
Gráfico Histórico do Ativo
De Set 2023 até Set 2024