Home / Knowledge / News / Apparel/Garments / American Apparel receives credit agreement waiver
American Apparel receives credit agreement waiver
02
Feb '11
On January 31, 2011, American Apparel Inc entered into a waiver (the “Credit Agreement Waiver”) to its Credit Agreement, dated as of March 13, 2009 (as previously amended or otherwise modified, the “Lion Credit Agreement”), among the Company, in its capacity as borrower, certain subsidiaries of the Company, in their capacity as facility guarantors, Wilmington Trust FSB, in its capacity as administrative agent and collateral agent, Lion Capital (Americas) Inc., as a lender, Lion/Hollywood L.L.C., as a lender, and other lenders from time to time party thereto.

The Credit Agreement Waiver waives, for the period from January 31, 2011 to but excluding February 11, 2011, the Company's obligation to maintain a minimum Consolidated EBITDA for the twelve consecutive fiscal month period ending January 31, 2011.

The Company is discussing possible amendments to the Lion Credit Agreement to address its compliance with the Specified Covenant for future trailing twelve-month periods, as well as making the Credit Agreement Waiver permanent beyond February 11, 2011. However, the Company can provide no assurance that it will be able to secure such amendments or extension nor, if secured, the terms thereof.

Under the terms of its revolving credit agreement with other lenders and Bank of America, N.A., as administrative agent (the “BofA Credit Agreement”), noncompliance with financial covenants (including the Specified Covenant) under the Lion Credit Agreement constitutes an event of default under the BofA Credit Agreement.

An event of default under the BofA Credit Agreement which is not waived would block the Company from making borrowings under its revolving credit facility, in which case the Company would have to obtain additional liquidity. An event of default under the Lion Credit Agreement and/or the BofA Credit Agreement could result in all indebtedness thereunder being declared immediately due and payable, in which case the Company would have to obtain additional sources of liquidity.

There can be no assurance that the Company would be able to obtain additional sources of liquidity on terms acceptable to the Company, or at all, or that our assets would be sufficient to repay in full our obligations under our debt instruments. The acceleration of any or all amounts due under the Lion Credit Agreement or the BofA Credit Agreement or the loss of the ability to borrow under the BofA Credit Agreement would have a material adverse impact on the Company's operations which would result in the need for the Company to modify its current business plan and/or curtail its operations and could affect the Company's ability to continue operations as a going concern.

American Apparel Inc

Must ReadView All

Textiles | On 25th Mar 2017

GST to positively impact retail value chain: CBRE

The implementation of the Goods and Services Tax (GST) bill in India...

Textiles | On 25th Mar 2017

MEGlobal to build first ever US MEG plant

Monoethylene glycol (MEG) producer MEGlobal plans to construct a new...

Courtesy: Ulster Carpet

Textiles | On 25th Mar 2017

Ulster Carpets acquires Griffith Textile Machines

Northern Ireland based manufacturer of carpets, Ulster Carpets said...

Interviews View All

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Krishnanand Tripathi
Textrade International Ltd

We believe in vocational education for entry-level employees, offering...

Binoy Ravjani
Hero's Fashion

‘One of the recent trends in hand block printing is the indigo process,...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search