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Centric Brands confirms reorganisation plan

22
Sep '20
Pic: Centric Brands
Pic: Centric Brands
US-based lifestyle brands collective Centric Brands Inc. recently announced that the US bankruptcy court for the Southern District of New York has issued a ruling confirming its reorganisation plan, which was supported by the company’s secured lenders and the unsecured creditors’ committee. After all conditions are finalised, the company intends to emerge from Chapter 11 by October end with a recapitalised balance sheet, new financing facilities, and significantly reduced debt and interest payments.

“Today’s announcement represents a critical moment in our journey to emerge as an even stronger company, poised for long-term growth. I am truly grateful to our dedicated employees for their hard work throughout this process and the COVID-19 pandemic. I’m also appreciative of the continued support of our brand licensors, retailers, sourcing network and lenders, which has allowed us to reach this milestone,” said Jason Rabin, chief executive officer of the company in a press release.

Centric Brands expects to emerge as a private company, under the supportive ownership of its current lenders led by Blackstone, Ares and HPS. Upon emergence, it expects to substantially reduce its funded second lien indebtedness, thereby positioning the business for future growth and success.

Blackstone will exchange its second lien debt for equity interests in the reorganised company. Existing senior lenders Ares and HPS will retain their senior loan positions and will receive equity interests in the reorganised company.

Further, the company expects to secure new exit financing in the form of a new securitisation facility, as well as new revolving and term loan facilities from its current secured lenders, which will help fund its exit from Chapter 11 and its go-forward operations.

Fibre2Fashion News Desk (DS)


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