A $300 million offer to take over North American clothing producer/retailer American Apparel (NYSE:APP, Forum) has been announced Monday from an investor group that includes Hagan Capital Group and Silver Creek Capital Partners.
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“The company remains focused on pursuing the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month”, she said.
American Apparel filed for bankruptcy in October, and this is one of many attempts by the former CEO to see the company successful once more.
The Company’s founder Dov Charney was sacked as CEO for alleged misconduct, including misusing company funds and failing to stop a subordinate from creating blog posts that defamed former employees.
Charney, who had led the company since he first hit upon the idea in his Tufts University dorm room in 1989 until he was forced out in a 2014 boardroom coup, has teamed up with private equity firms Hagan Capital Group and Silver Creek Capital Partners in a $300m (£206m) bid for the troubled retailer.
The takeover offer includes $130 million from the investors, including $90 million of new stock and $40 million from a new loan.
It will be a condition to the effectiveness of the Amended Plan that American Apparel obtain the foregoing commitment for $40 million of additional exit capital, which is in addition to the $40 million of new capital previously committed by the Committee of Lead Lenders.
The total enterprise value of the bid amounts to $300 million, compared with $180 million to $270 million for the debtor plan, according to the statement.
The consortium of investors noted that the $300 million offer represents an “upward revision” from the initial reported offer of $200 million.
The investors said that senior lenders would fully recover their money, versus 33% to 77% under the other plan.
In early December, Mr. Charney revealed that he has hired Cardinal Advisors to help him to bring in investors, which will make him involved with the company. If the Company is not turned around it will be a pointless loss of American manufacturing jobs. “We strongly urge the creditors to evaluate and accept our offer”.
About American ApparelAmerican Apparel, Inc.
Indeed, American Apparel’s finances have been a mess since Charney was ousted, but the company wasn’t doing particularly well financially under him either.
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“This discussion is not just about the impact on the investor returns, but also about the livelihood of thousands of workers”, Charney said in a statement yesterday.
