CIT Group Inc. has two stress-inducing deadlines looming on the horizon: Friday, for a debt tender offer, and Oct. 1, for a restructuring plan.
In a regulatory filing Tuesday with the Securities and Exchange Commission, CIT said the first steps of its restructuring plan are to complete a tender offer for its outstanding $1 billion in senior notes due Monday. It already reached an agreement with major bondholders for a $3 billion secured term loan facility, which has been drawn down. Presuming the tender offer is successful, neither CIT nor the steering committee of the bondholder lending group intends to file for Chapter 11 bankruptcy court protection.
However, if the tender offer is not completed and the firm is unable to obtain alternative financing, the company said it would be in default under its credit facility and “could seek relief” under the auspices of the bankruptcy court.
CIT previously said it had received enough offers, or 58 percent of the debt to be tendered, to complete the repurchase program. The tender offer expires Friday.
Shares of CIT dropped 28 cents, or 18.9 percent, to $1.20 in New York Stock Exchange trading Tuesday.
Looking ahead, CIT is working with the steering committee to develop a restructuring plan acceptable to a majority of the committee’s members by Oct. 1. A draft agreement is due Friday and presumably will include completion of the Aug. 17 tender offer.
The SEC filing was necessitated by CIT’s failure to file its quarterly report for the period ended June 30. CIT included information about the tender offer and events leading up to it, as well as the planned restructuring strategy, as reasons for being unable to file a quarterly Form 10-Q report on time. The quarterly reports are due 40 days after the end of the fiscal period, according to the SEC.
CIT said it expects to file the 10-Q by Monday. It also reiterated material from a Form 8-K report filed on July 21 in which it said it expects to file a second-quarter net loss in excess of $1.5 billion. The six months loss is expected to be more than $1.9 billion.
Moreover, the company repeated from its July 21 filing that its “ability to continue as a going concern” had been placed in “substantial doubt” because of the effects of “ongoing stress in the credit markets, operating losses, credit ratings downgrades and regulatory and cash restrictions” on its funding strategy and liquidity position.
An Aug. 9 research note by CreditSights analysts Adam Steer and David Hendler left much doubt about CIT’s future.
The two said, “Over the longer time horizon, we believe the threat of bankruptcy becomes more viable because CIT’s business model is broken.” They added a broad-reaching exchange offer might be a possibility given CIT’s sizable maturities in November totaling $872 million and the terms of the loan facility that require the adoption of a restructuring plan by Oct. 1.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast