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Bakers completes equity & debt transaction
Feb '08
Bakers Footwear Group Inc announced that it issued 350,000 shares of common stock and entered into a $7.5 million subordinated secured term loan with Private Equity Management Group Inc (PEMG) and an entity affiliated with PEMG. The Company received net proceeds of approximately $6.7 million, net of transaction fees and expenses.

The loan bears interest at a rate of 15% per annum, with principal and interest payable monthly from March 2008 through February 2011. PEMG received the 350,000 shares of the Company's common stock as additional consideration in connection with the loan. The loan agreement contains financial and other customary covenants.

“We are pleased to complete this equity and debt transaction, which provides us with additional liquidity to execute our turnaround plan,” stated Peter A. Edison, Chairman, Chief Executive Officer and President of Bakers Footwear.

“Importantly, this financing marks a tremendous vote of confidence in Bakers – our store format, our strategy and operating platform. Since September, our Company has been focused on the execution of our turnaround and increasing liquidity. We made management changes and refocused our merchandising plans to improve sales and margin performance.

In addition, we initiated a cost reduction plan, which is expected to lead to annual savings of approximately $8.0 million that will positively impact operating results in fiscal 2008 with benefits also positively affecting net income in the fourth quarter of fiscal 2007.

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