Tefron to buy seamless activities of Nouvelle Canada

20 Nov '10

4 min read

Tefron will issue in the aggregate a number of new shares equal to 49% of its total outstanding Tefron shares following the issuance, to cover the acquisition of the Nouvelle operation, as well as for the $5.2 million dollar investment by the Lieberman family, Shamir Insurance, and Rimon Funds. Tefron will issue to Nouvelle 600,000 shares as consideration for the acquisition of the assets contemplated under the transaction. Under the agreements, the Lieberman family, the controlling shareholders in Nouvelle, is to invest $2.7 million, to acquire 20.5% of Tefron shares, increasing its holdings in Tefron to 30.2%, Shamir Insurance is to invest $ 1.3 million for a consideration of 9.9% of Tefron shares, and the investors group led by Rimon Funds are to invest a total of $1.2 million in exchange for 9.1% of the company shares.

The transaction is subject to fulfillment of conditions, including, inter alia, approval of the transaction at the special general shareholders meeting of the company by a special majority, and a modified financing arrangement with the banks. The company is in advanced stages of negotiations with the financing banks to increase its credit and debt facilities by at least $5 million and to determine new financial covenants to the satisfaction of new investors. The company is awaiting approval from the banks for these transactions, and there is no certainty that such authorization will be received. The company will provide updated information at the time of the signing of a final modified financing arrangement with its bank lenders.

The company intends to call for a shareholders meeting to approve the transactions. The invitation will include a description of the transactions, financial reports, and a Board report in relation to the acquired operations, as required by the Securities Regulations (Transaction between a Company and Controlling Shareholder) 2001 and Regulations (Private share offering in a listed company) 2000.

Tefron Ltd

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