The Talbots, Inc. (NYSE:TLB) today announced that it amended and
restated its secured revolving loan agreement as entered into on
April 10, 2009 with Aeon Co., Ltd., the Company’s majority
shareholder, in order to repay all of its outstanding third party
debt. Pursuant to the Agreement, the principal amount of the
Company’s earlier $150 million secured credit facility with Aeon
was increased to $250 million.
On December 29, 2009 Talbots drew $245 million under the Amended
Facility and paid off all of its third party bank indebtedness
totaling approximately $241 million in principal amount, in
addition to other related costs and expenses associated with the
amendment and debt repayment.
Talbots President and Chief Executive Officer, Trudy F.
Sullivan, said, “Our comprehensive financing solution to delever
our balance sheet, which we announced last month, included a
repayment of all of the Company’s existing debt. With this
satisfaction of all of our outstanding third party debt and the
elimination of our year-end maturities, we can now more closely
focus on completing the merger between Talbots and BPW to deliver
greater shareholder value.”
Under the amended revolving loan facility, interest on the
outstanding principal is one-month LIBOR plus 600 basis points,
with interest payable monthly in arrears. The facility is secured
by all of the Company’s assets, including charge card receivables,
inventory and mortgages on its Hingham, MA headquarters facility
and its Lakeville, MA distribution facility.
The Amended Facility has a scheduled maturity date of the
earlier to occur of April 16, 2010 or the consummation of the
previously announced plan for the merger between Talbots and BPW
Acquisition Corp. On December 8, 2009, the Company announced a
comprehensive financing solution which included three related
transactions: an agreement and plan of merger with BPW Acquisition
Corp.; the retirement of Aeon’s equity and repayment of Talbots
existing debt; and a commitment for up to a new $200 million
revolving credit security from GE Capital.
Additional information related to this financing is included in
the Company’s Form 8-K, which will be filed today, January 4,
2010.
The Talbots, Inc. is a leading specialty retailer and direct
marketer of women’s apparel, shoes and accessories. At the end of
third quarter 2009, the Company operated 589 Talbots brand stores
in 46 states, the District of Columbia, and Canada. Talbots brand
on-line shopping site is located at www.talbots.com.
Cautionary Statement and Certain Risk Factors to
Consider
In addition to the information set forth in this press release,
you should carefully consider the risk factors and risks and
uncertainties included in the Company’s Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q, as well as in this press
release below.
This press release contains forward-looking information within
the meaning of The Private Securities Litigation Reform Act of
1995. These statements may be identified by such forward-looking
terminology as “expect,” “achieve,” “plan,” “look,” “believe,”
“anticipate,” “outlook,” “will,” “would,” “should,” “potential” or
similar statements or variations of such terms. All of the
information concerning our outlook, future liquidity, future
financial performance and results, future credit facilities and
availability, future cash flows and cash needs, and other future
financial performance or financial position, as well as our
assumptions underlying such information, constitute forward-looking
information. Our forward looking statements are based on a series
of expectations, assumptions, estimates and projections about the
Company, are not guarantees of future results or performance, and
involve substantial risks and uncertainty, including assumptions
and projections concerning our liquidity, internal plan,
regular-price and markdown selling, operating cash flows, and
credit availability for all forward periods. Our business and our
forward-looking statements involve substantial known and unknown
risks and uncertainties, including the following risks and
uncertainties:
- our ability to satisfy the
conditions to consummation of the BPW and related
transactions;
- BPW’s ability to obtain the
necessary support of its stockholders to approve the transactions,
including the risk that the exercise of conversion rights by BPW’s
stockholders, together with transaction costs incurred by BPW, may
cause the balance of the BPW trust account to fall below the level
necessary to consummate the transaction;
- BPW’s and our ability to obtain
the necessary participation of BPW warrant holders in the exchange
of BPW warrants for Talbots stock or warrants;
- our ability to satisfy the
conditions to the $200 million credit commitment provided by GE or,
failing that, to obtain sufficient alternative financing on a
timely basis;
- the availability of proceeds of
the BPW trust account following any exercise by stockholder of
their conversion rights and the incurrence of transaction
expenses;
- the continuing material impact
of the deterioration in the U.S. economic environment over the past
two years on our business, continuing operations, liquidity,
financing plans, and financial results, including substantial
negative impact on consumer discretionary spending and consumer
confidence, substantial loss of household wealth and savings, the
disruption and significant tightening in the U.S. credit and
lending markets, and potential long-term unemployment levels;
- our level of indebtedness and
our ability to refinance or otherwise address our short-term debt
maturities, including all Aeon short-term indebtedness, on the
terms or in amounts needed to satisfy these maturities and to
address our longer-term maturities, as well as our working capital,
strategic initiatives and other cash requirements;
- any lack of sufficiency of
available cash flows and other internal cash resources to satisfy
all future operating needs and other Company cash
requirements;
- satisfaction of all borrowing
conditions under all Aeon credit facilities including no events of
default, accuracy of all representations and warranties, solvency
conditions, absence of material adverse effect or change, and all
other borrowing conditions;
- risk of any default under our
credit facilities;
- our ability to achieve our 2009
financial plan for operating results, working capital, liquidity
and cash flows;
- risks associated with the
appointment of and transition to a new exclusive global merchandise
buying agent and that the anticipated benefits and cost savings
from this arrangement may not be realized or may take longer to
realize than expected, and risk that upon any cessation of the
relationship for any reason we would be able to successfully
transition to an internal or other external sourcing function;
- our ability to continue to
purchase merchandise on open account purchase terms at existing or
future expected levels and with extended payment of accounts
payable and risk that suppliers could require earlier or immediate
payment or other security due to any payment concern or
timing;
- risks and uncertainties in
connection with any need to source merchandise from alternate
vendors;
- any disruption in our supply of
merchandise;
- our ability to successfully
execute, fund, and achieve our supply chain initiatives,
anticipated lower inventory levels, cost reductions, and our other
initiatives;
- the risk that anticipated
benefits from the sale of the J. Jill brand business may not be
realized or may take longer to realize than expected and the risk
that estimated or anticipated costs, charges and liabilities to
settle and complete the transition and exit from and disposal of
the J. Jill brand business, including both retained obligations and
contingent risk for assigned obligations, may materially differ
from or be materially greater than anticipated;
- our ability to accurately
estimate and forecast future regular-price and markdown selling,
operating cash flows and other future financial results and
financial position;
- the success and customer
acceptance of our merchandise offerings;
- future store closings and
success of and necessary funding for closing underperforming
stores;
- risk of impairment of goodwill
and other intangible and long-lived assets; and
- the risk of continued compliance
with NYSE continued listing conditions.
All of our forward-looking statements are as of the date of this
press release only. In each case, actual results may differ
materially from such forward-looking information. The Company can
give no assurance that such expectations or forward-looking
statements will prove to be correct. An occurrence of or any
material adverse change in one or more of the risk factors or risks
and uncertainties referred to in this press release or included in
our periodic reports filed with the Securities and Exchange
Commission could materially and adversely affect our continuing
operations and our future financial results, cash flows, prospects,
and liquidity. Except as required by law, the Company does not
undertake or plan to update or revise any such forward-looking
statements to reflect actual results, changes in plans,
assumptions, estimates or projections, or other circumstances
affecting such forward-looking statements occurring after the date
of this release, even if such results, changes or circumstances
make it clear that any forward-looking information will not be
realized. Any public statements or disclosures by us following this
release which modify or impact any of the forward-looking
statements contained in this release will be deemed to modify or
supersede such statements in this release.
Important Additional Information and Where to Find It
On December 23, 2009, Talbots filed with the SEC a Registration
Statement on Form S-4 (Registration No. 333-163955) containing a
preliminary Prospectus/Proxy Statement/Information Statement
regarding the proposed transaction between Talbots and BPW. This
material is not a substitute for the final Prospectus/Proxy
Statement/Information Statement regarding the proposed transaction.
Talbots intends to file a tender offer statement and other
documents, as required, with the SEC in connection with the warrant
exchange offer. Investors and security holders are urged to read
the preliminary Prospectus/Proxy Statement/Information Statement,
the final Prospectus/Proxy Statement/Information Statement and the
tender offer statement when available carefully because they
contain important information. The final Prospectus/Proxy
Statement/Information Statement will be mailed to stockholders of
Talbots and BPW. Investors and security holders will be able to
obtain free copies of the Registration Statement, the final
Prospectus/Proxy Statement/Information Statement, the tender offer
statement and other documents filed with the SEC by Talbots and BPW
through the web site maintained by the SEC at www.sec.gov. In addition, investors and
security holders will be able to obtain free copies of the
Registration Statement, the final Prospectus/Proxy
Statement/Information Statement and the tender offer statement when
they become available from Talbots by requesting them in writing at
Investor Relations Department, One Talbots Drive, Hingham, MA
02043, or by telephone at (781) 741-4500. The documents filed by
BPW may also be obtained by requesting them in writing to BPW at
BPW Acquisition Corp., Arjay (Richard) Jensen, SVP at BPW
Acquisition Corp., 767 Fifth Avenue, 5th Floor, NY, NY 10153, or by
telephone at (212) 287-3310.
Talbots, BPW and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the security holders of BPW in
connection with the proposed transaction between Talbots and BPW.
You can find information regarding Talbots’ directors and
executive officers in Talbots’ definitive proxy statement for its
2009 Annual Meeting of Stockholders, which was filed with the SEC
on April 24, 2009. You can find information regarding
BPW’s directors and executive officers in BPW’s Annual Report on
Form 10-K for its fiscal year ended December 31, 2008, which was
filed with the SEC on March 30, 2009. These documents can be
obtained free of charge from the sources indicated above.
Investors and security holders may obtain additional information
regarding the interests of such participants by reading the final
Prospectus/Proxy Statement/Information Statement when it becomes
available.
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