Body Central closes $18mn secured notes private placement

30 Jun '14

2 min read

Body Central Corp., announced that it has completed the previously announced review of financing, transactional and strategic alternatives with the closing of a private placement of $18.0 million in principal amount of its 7.5% subordinated secured convertible notes (the "notes"). Interest on the notes will accrue at 7.5% per annum and each quarterly interest payment will be paid in kind by increasing the principal amount due under the notes unless the Company exercises its option to pay cash interest at a rate of 6.75% per annum.

The notes are convertible into shares of the Company's common stock at any time at the option of the holder thereof at a conversion price of $0.35, subject to certain adjustments. All amounts will be due and payable in cash on the third anniversary of the issue date, unless earlier converted. In addition, the Company issued new series of its preferred stock, with nominal value, to the holders of the notes granting the power to vote the shares of common stock underlying the notes as if the notes were converted in full. The terms of the preferred stock will grant three of the investors the ability to each elect one director to the Company's board of directors. The Company plans to seek stockholder approval within 90 days for a reverse stock split.

Under the Nasdaq Marketplace Rules, the Company was required to obtain stockholder approval for the issuance of the notes prior to closing. However, in order to preserve the financial viability of the Company, it was necessary to consummate the transaction before stockholder approval could be obtained. The Company acknowledges the failure to comply with Marketplace Rules 5635(b) and (d), and has determined to voluntarily delist from the Nasdaq Stock Market.

Houlihan Lokey Capital Inc. acted as the financial advisor to the Company in connection with the private placement transaction.

About Body Central

Founded in 1972, Body Central Corp. is a multi-channel, specialty retailer offering on trend, quality apparel and accessories at value prices. As of June 27, 2014, the Company operated 275 specialty apparel stores in 28 states under the Body Central and Body Shop banners, as well as a direct business comprised of a Body Central catalog and an e-commerce website at www.bodycentral.com. The Company targets women in their late teens to mid-thirties from diverse cultural backgrounds who seek the latest fashions and a flattering fit.

Body Central Corp

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