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Alba Health to build up Tefron's focus on its core businesses

22 Dec '05
2 min read

Misgav based boutique-quality everyday intimate apparel producer Tefron Ltd announced that its Board of Directors had authorized the exercise of its option to require Alba Health LLC to purchase its ownership interest in Alba Health, which manufactures and sells textile healthcare products.

Under the terms of the option agreement, the net proceeds payable to Tefron from the sale of the interest are expected to be approximately $11 million payable over three years, and Tefron expects to record a loss of approximately $6.5 million in the fourth quarter of 2005, most of which is non-cash.

Upon completion of the transaction, the company will cease to consolidate the financial statements of Alba Health, which include net debt of approximately $9.4 million.

Alba Health's obligation to purchase Tefron's ownership interest, and the receipt of payment by Tefron for its interest, are subject to the satisfaction of conditions relating to Alba Health's assets and liabilities, compliance with its credit agreement and obtaining of sufficient financing. There is no assurance that these conditions will be satisfied. If they are not satisfied, the option exercise period under the option agreement will be extended accordingly.

Yos Shiran, Tefron's Chief Executive Officer, said: "I am pleased with this strategic move. Tefron's exercise of the option to sell its interest in Alba Health will strengthen Tefron's focus on its core businesses - intimate apparel,active wear and swim wear. Completion of the transaction will also improve the company's balance sheet by reducing debt and increasing cash."

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