Footstar BoD declares special cash distribution, payable in June

10 May '08

3 min read

In support of the continued operation of the Kmart business through year-end, the Company has entered into an amended credit agreement with Bank of America to extend the term of its existing credit agreement to the earlier of December 31, 2008 or the termination of the Kmart agreement. The amended agreement also lowers the maximum amount that may be borrowed from $100 million to $50 million, reflecting the Company's reduced needs.

The Company has focused on carefully managing its business and financial position in light of the scheduled expiration of its agreement with Kmart at the end of 2008 and, accordingly, has sought to return excess cash to shareholders. In 2007, the Company declared and paid a $5.00 per share distribution.

In anticipation of the wind-down of its businesses, in April 2008, the Company monetized the value of its brands by selling them to Kmart for approximately $13.0 million. With this additional cash, the Board determined that the Company could pay a $1.00 per share distribution at this time, while maintaining an appropriate liquidity position to properly manage the business through the end of the year.

Footstar Inc

More Footstar inc News... More Fashion News - United States Of America...