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.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye