叠别诲听叠补迟丑听&听叠别测辞苍诲听Inc.聽said on Monday it was planning to听谤补颈蝉别听some $1 billion through an offering of preferred stock and warrants in a last-ditch effort to stave off听产补苍办谤耻辫迟肠测.
The home goods retailer said in securities filings that if it can’t complete the complex transaction,听it would “likely file for听产补苍办谤耻辫迟肠测聽protection.” The chain has said in recent weeks that it had聽聽on a loan and may not be able to remain in business, raising concerns about its future.
Bed聽叠补迟丑听&听叠别测辞苍诲听held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering, two people familiar with the matter said.
Shares of the retailer, which closed up 92.1% at $5.86 in a roller-coaster session, were down 33.5% in extended trading after news of the proposed offering.
叠别诲听叠补迟丑听&听叠别测辞苍诲听has been part of the meme stock phenomenon, with shares skyrocketing as much as 400%聽last year聽when activist investor and Gamestop Corp聽chairman Ryan Cohen聽聽and sought changes.
叠别诲听叠补迟丑听said it was planning to听谤补颈蝉别听just over $1 billion through sales of preferred stock and warrants and from securities when the warrants are exercised.
叠别诲听叠补迟丑听will receive a waiver on its recent bank default should the proposed offering succeed, the company said.
The embattled retailer said it would use the proceeds of the offering to repay outstanding revolving loans which it would then use to make an interest payment on bonds it missed on February 1. It also plans to draw an additional $100 million from a first-in-last-out loan from investment firm Sixth Street, that takes priority for repayment in a possible听产补苍办谤耻辫迟肠测.
Los Angeles-based investment bank B. Riley Securities is the sole book runner on the deal, earning up to a maximum fee of $10 million.
叠别诲听叠补迟丑听&听叠别测辞苍诲听also appointed Holly Etlin, a听产补苍办谤耻辫迟肠测聽expert, as interim chief financial officer.
The Union, New Jersey-based home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped.
In January, the company听谤补颈蝉别d doubts about its ability to continue as a going concern just months after it聽聽more than $500 million in new financing, as well as job cuts and 150 store closures.
On Monday,聽叠别诲听叠补迟丑听said it planned to close an additional 150 stores, on top of 250 previously announced store closures.
叠别诲听叠补迟丑听&听叠别测辞苍诲听said in January it had聽聽on a loan from JPMorgan Chase Bank N.A. Bloomberg News聽聽that the company’s efforts to find a buyer had also stalled.
After it had filed for听产补苍办谤耻辫迟肠测聽protection, rental car provider Hertz Global Holdings聽HTZ.O聽attempted to sell new shares but pulled the offering after the U.S. Securities and Exchange Commission (SEC)聽聽without elaborating on specifics.
“It鈥檚 a similar situation in which a deeply financially distressed company is attempting to sell securities,” said Lynn LoPucki, a professor at the University of Florida. “The same considerations are operating in both situations. The fact that one is in听产补苍办谤耻辫迟肠测聽and the other is not, would not make any difference in terms of SEC regulation.”
厂辞耻谤肠别蝉听聽Reuters that聽叠别诲听叠补迟丑听&听叠别测辞苍诲听has lined up liquidators to close additional stores unless a last-minute buyer emerges. – Reuters
