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Talbots implements new $150 mn Expense Reduction Program
14 Apr '09
5 min read
“As such, we greatly appreciate Aeon's ongoing financial support and confidence in the overall strategic direction of our Company. With the addition of this new $150 million revolving loan facility, we have significantly added to our liquidity, which will help us navigate through these most turbulent times, and to further support the implementation of our long-range plan designed to reinvigorate our brand and return Talbots to profitable growth.”
The Company stated that the new $150 million secured revolving loan facility will be used for general corporate and working capital purposes, including vendor payments. This new revolving loan facility is in addition to the Company's existing $215 million committed working capital facilities.
Under the new revolving loan facility, interest on the outstanding principal will be set at one-month LIBOR plus 600 basis points, with interest payable on the last day of each month in arrears. The facility is secured by the Company's charge card receivables and will be secured by mortgages on its Hingham, MA headquarters facility and its Lakeville, MA distribution facility. Amounts under the facility may be borrowed, prepaid and re-borrowed prior to maturity.
An upfront loan facility commitment fee of 1% will be payable at initial draw down. Funding is subject to lien and mortgage recordings and certain existing lender waivers, among other customary conditions. The facility also provides for prepayment and maturity in the event of certain qualified transactions, such as certain asset securitizations and asset collateralization. This new working capital revolving loan facility matures April 17, 2010 and has no financial covenants.
Key Actions to Date
Improved liquidity
• Obtained new $150 million secured working capital revolving loan facility with Aeon Co., Ltd., the Company's indirect majority shareholder;
• Refinanced $200 million term loan to a semi-annual interest-only loan with Aeon Co., Ltd., maturing in 2012, and paid off the J. Jill acquisition debt in full;
• Eliminated all financial covenant tests under all credit facilities;
• Converted $165 million working capital facilities to committed facilities;
• Obtained $50 million subordinated term loan from Aeon (U.S.A), Inc.;
• Aeon provided guaranty of each of the Company's existing working capital facilities and revolving loan credit facilities;
• Suspended the quarterly dividend and froze the defined benefit pension plans.
Click here to view more:
The Company stated that the new $150 million secured revolving loan facility will be used for general corporate and working capital purposes, including vendor payments. This new revolving loan facility is in addition to the Company's existing $215 million committed working capital facilities.
Under the new revolving loan facility, interest on the outstanding principal will be set at one-month LIBOR plus 600 basis points, with interest payable on the last day of each month in arrears. The facility is secured by the Company's charge card receivables and will be secured by mortgages on its Hingham, MA headquarters facility and its Lakeville, MA distribution facility. Amounts under the facility may be borrowed, prepaid and re-borrowed prior to maturity.
An upfront loan facility commitment fee of 1% will be payable at initial draw down. Funding is subject to lien and mortgage recordings and certain existing lender waivers, among other customary conditions. The facility also provides for prepayment and maturity in the event of certain qualified transactions, such as certain asset securitizations and asset collateralization. This new working capital revolving loan facility matures April 17, 2010 and has no financial covenants.
Key Actions to Date
Improved liquidity
• Obtained new $150 million secured working capital revolving loan facility with Aeon Co., Ltd., the Company's indirect majority shareholder;
• Refinanced $200 million term loan to a semi-annual interest-only loan with Aeon Co., Ltd., maturing in 2012, and paid off the J. Jill acquisition debt in full;
• Eliminated all financial covenant tests under all credit facilities;
• Converted $165 million working capital facilities to committed facilities;
• Obtained $50 million subordinated term loan from Aeon (U.S.A), Inc.;
• Aeon provided guaranty of each of the Company's existing working capital facilities and revolving loan credit facilities;
• Suspended the quarterly dividend and froze the defined benefit pension plans.
Click here to view more:
Talbots Inc
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