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

Courtesy: ABARES

Textiles | On 13th Dec 2017

Australian cotton production to grow 4% in 2017-18: ABARES

Cotton production in Australia is forecast to rise by 4 per cent to...

Global economy now growing by about 3%: UN

Textiles | On 13th Dec 2017

Global economy now growing by about 3%: UN

There is an upturn in the global economy, and it is now growing by...

Winners of Outstanding Award for Exceptional Performance with Anusha Alles (extreme right) and Sakura Manthreerathne, P.A.C.E. specialist at Brandix; Courtesy: Brandix

Apparel/Garments | On 13th Dec 2017

Brandix’s female workers benefit from GAP’s P.A.C.E

A group of 181 Brandix female associates have recently completed...

Interviews View All

Stefan Warnaar
Peak to Plateau

People are willing to pay for quality and performance

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Anisha Chaudhari
Threads & Shirts

Threads &amp; Shirts is a freshly-tailored concept providing men/women a...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

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

December 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search