Kellwood commences consent solicitation with respect to senior debentures

April 01, 2008 - United States Of America

Kellwood Company announced that it has commenced a solicitation of consents from each holder of the Company's 3.50% Convertible Senior Debentures due 2034 to obtain a waiver of such holder's right to require Kellwood to repurchase the Debentures held by such holder on April 10, 2008 pursuant to the Company's previously-announced Notice of Fundamental Change.

Each holder of Debentures that consents to forgo the requirement for the Company to repurchase such holder's Debentures will receive a consent payment of $226.00 in cash per $1,000 principal amount of Debentures for which a valid waiver is received and accepted on or prior to 12:00 midnight EDT on April 9, 2008, the expiration date for the Solicitation, whether or not any other holders of Debentures elect to consent to the proposed waiver.

In addition, all Debentures outstanding following the settlement of the Fundamental Change offer will receive a second-lien on the collateral securing the Company's existing credit facility, which consists of substantially all of the intellectual property, accounts receivable, inventory, deposit accounts and other personal property of Kellwood and its co-borrowers under the existing credit facility (consisting of direct and indirect subsidiaries of Kellwood), as well as a new covenant requiring the provision of annual and quarterly financial information of Kellwood.

The solicitation of the holders of the Debentures is not conditioned on the receipt of any minimum percentage of waivers received by the Company, but rather is being made on a holder by holder basis.

Regardless of what percentage of Debenture holders consent to the proposed waiver, all non- consenting holders will retain the right to require Kellwood to purchase their Debentures pursuant to the outstanding Fundamental Change offer.

In addition, the delivery of a waiver will not affect (i) a holder's right to receive 100% of the principal amount of the Debentures at maturity, on June 15, 2034, or right to require Kellwood to repurchase its Debentures on the scheduled redemption dates provided in the Indenture (the earliest of which is June 15, 2011), (ii) any other rights of a holder under the Debentures, other than the Fundamental Change repurchase option or (iii) a holder's right to require Kellwood to repurchase the Debentures upon the occurrence of a future Fundamental Change.

In the event the Solicitation is not consummated for any reason, holders who have delivered waivers in connection therewith will be deemed to have tendered into the Fundamental Change repurchase offer and the principal amount of the Debentures for which such holder had originally delivered a waiver will be purchased by Kellwood in connection with the Fundamental Change repurchase offer concurrently with the closing of the Fundamental Change repurchase offer.

The Consent Solicitation is eligible for the DTC Automated Tender Offer Program ("ATOP"). Holders of Debentures who wish to consent to the proposed waiver, must deliver consents through DTC's Automated TenderOffer Program ("ATOP").

If a holder has previously delivered a Fundamental Change repurchase election and such holder now wishes to deliver a consent in connection with the Solicitation, such holder must first withdraw its repurchase election by delivering a notice of withdrawal to the Union Bank of California, N.A, Attention Josefina Benanvides.

In such case, the withdrawal must occur sufficiently in advance of 12:00 midnight EDT on April 9, 2008, in order to allow processing of the withdrawal and affirmative consent instructions.