After funding, forgiveness of defaults caused by change of control is allowed
SECAUCUS, N.J., April 17, 2024 (GLOBE NEWSWIRE) — The Children's Place, Inc. (NASDAQ: PLCE)The company, an omnichannel specialty children's brand portfolio with an industry-leading digital-first model, today announced that it has entered into a new financing agreement for an unsecured subordinated loan with majority shareholder Mithaq Capital SPC (“Mithaq”). Announced. $90 million term loan. Financing will occur no later than April 19, 2024 (the “New Misak Term Loan”).
The new Mithaq Term Loan is on generally better terms than the previously announced term loan (the “Proposed Term Loan”) contemplated by a non-binding term sheet that the Company entered into with 1903P Loan Agent, LLC. further strengthens our liquidity position. ). As a result of this new financing, the Company does not intend to further pursue the proposed term loan.
The Company will use the net New Mitak Term Loan to repay the Company's existing $50 million term loan under the Company's Amended and Restated Credit Agreement dated May 9, 2019 (the “Credit Facility”). We plan to use the proceeds to reduce some of our funding. The company's accounts payable balances with vendors and other general corporate purposes. As previously disclosed, Mithaq's acquisition of our common stock resulted in a change of control that resulted in a default under the credit facility. Upon completion of the financing of the New Mithaq Term Loan, an amendment to the Credit Facility will become effective, which will, among other things, permit us to enter into the New Mithaq Term Loan and waive any event of default due to a change of control.
The new Mithaq Term Loan matures on April 16, 2027 and bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 4.00% per annum, with accrued interest payments due on April 30, 2025. It will be deferred. This is different from the proposed term loan. , New Mithaq Term Loan does not include closing fees, prepayment fees, termination fees, or other fees typical of this type of transaction and imposes additional reserves on borrowings under the credit facility. It does not contain certain restrictive provisions and is subject to significant limitations. Lower interest rate than the proposed term loan.
Seamus Toll, Chief Operating Officer and Chief Financial Officer of The Children's Place, said: than what is being considered in the proposed term loan. The company is now well-positioned to execute on its industry-leading digital strategy, with a continued focus on improving operational efficiency and profitability. ”
said Turki S. AlRajhi, Chairman of The Children's Place and Chairman and CEO of Mithaq. This financing agreement is not only in the best interest of all shareholders and superior to other options, but also puts The Children's Place in a stronger financial position. ”
Since February 29, 2024, the Company has received $168.6 million in funding from Mithaq, consisting of a $90 million new Mithaq Term Loan and a previously announced $78.6 million interest-free, unsecured loan. Consists of subordinated term loan funds (the “Initial Mithaq Term Loan”). ”).
Additional details regarding the New Mithaq Term Loan are contained in the Form 8-K that we file with the Securities and Exchange Commission following the financing of the New Mithaq Term Loan.
About Children's Place
The Children's Place is an omnichannel specialty children's brand portfolio with an industry-leading digital-first model. The company's global retail and wholesale network includes distribution in 16 countries through four digital storefronts, more than 500 stores in North America, wholesale markets, and six international franchise partners. The Children's Place is committed to being a women-led company with industry-leading gender diversity at all levels of senior management and workforce, benefiting our customers, employees, investors, suppliers, and the company. We are proud of our commitment to sustainable business practices. the community it serves; The Children's Place mainly sells its own brands “The Children's Place,'' “Gymboree,'' “Sugar & Jade,'' and “PJ Place.'' For more information, please visit www.childrensplace.com and www.gymboree.com. Also, check out our social media channels: Instagram, Facebook, and X (formerly known as Twitter, YouTube, and Pinterest).
About Mitak
Mithaq Capital SPC is an affiliate of Mithaq Holding Company, a diversified family office headquartered in Saudi Arabia that invests in public equity, private equity, real estate, and income-generating assets in domestic and international markets. Mithaq follows a disciplined value investing approach based on the principle of margin of safety. Mithaq is a long-term strategic shareholder with a history of owning high-quality businesses, supporting first-class management teams, and championing long-term partnerships based primarily on trust. Mithaq is a separate portfolio company existing under the laws of the Cayman Islands. For more information, please visit www.mithaqholding.com.
Forward-looking statements
this press release It contains or May include Positive statement Created pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This includes, but is not limited to, statements regarding the New Mitak Term Loan and the Initial Mitak Term Loan. Forward-looking statements typically include words such as “may,” “will,” “should,” “plan,” “anticipate,” “expect,” “anticipate,” and “estimate”. Although forward-looking statements are identified by the use of terminology, forward-looking statements may be expressed in different ways. These forward-looking statements are based on the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are discussed in our filings with the Securities and Exchange Commission, including in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. It is stated in the submitted documents. Uncertainties that could cause actual results and performance to differ materially include the risk that we may not be able to successfully measure changes in fashion trends and consumer tastes, the competitiveness of our business and consumer spending; risks arising from dependence on the spending patterns of individuals. risks related to the COVID-19 pandemic, which may be affected by changes in economic conditions (including inflation), including the impact of the COVID-19 pandemic on our business or the economy generally; risks that our strategic initiatives may be affected; sales and profit margin growth may be delayed or the expected improvements may not occur; the outbreak of COVID-19 or other diseases; the development of overseas supply sources; Risk of delays, interruptions, disruptions and increased costs in our global supply chain, including due to non-compliance with countries that are politically unstable, and where our vendors have high ethical standards, including the use of forced, indentured or child labor. countries that do not adhere to good business practices, the risk that raw material and energy prices will increase beyond current expectations, or the Company's risk of value engineering, price increases, consumer protection, employment, privacy and information security laws and regulations; various types of litigation, including class actions brought pursuant to the Act, the inability to offset increased costs from the imposition of regulations affecting the importation of foreign products; – uncertainties in manufactured goods, including tariffs and tariffs, weather patterns and the possibility that the Company's preliminary unaudited results for the fourth quarter of fiscal 2023 may differ (possibly materially) from actual results for the period; A certain risk. Readers are cautioned not to place undue reliance on these forward-looking statements. These statements speak only as of the date on which they are made. The Company undertakes no obligation to publicly update any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. I am not responsible.
Children's Place contact information:
Investor Information (201) 558-2400 Ext. 14500
Mitak contact information:
Mithaq-Capital@MithaqHolding.com
