Kellwood Co.’s noteholders continue to provide it with additional time to work out its financial arrangements.
This story first appeared in the July 21, 2009 issue of WWD. Subscribe Today.
The St. Louis-based sportswear firm has been granted two additional extensions on the maturity date of $140 million in notes. The first expired at midnight Monday and the second is set to expire at midnight Wednesday. Two deadlines passed last week without a resolution of the notes issue.
A spokesman for Kellwood said negotiations with noteholders, in particular with Deutsche Bank, are ongoing. As long as negotiations continue, there is the possibility of additional extensions beyond Wednesday, he added.
Meanwhile, Kellwood also has been granted forbearance from its lender for a few weeks, the spokesman said. The agreement allows the apparel firm to hold off making payments on the principal and interest on its loan on a temporary basis. It still bears the responsibility for making those payments at some point.
Kellwood executives have been exploring options since Deutsche Bank, the largest noteholder, said earlier this month it would not support a proposed swap of the notes, even though it had played a key role in negotiating new terms of the exchange offer.
The situation is said to be fluid as negotiations with Deutsche Bank continue, but there is no certainty a resolution can be reached. If not, Kellwood would have to explore other options, including a Chapter 11 bankruptcy filing.
Kellwood was acquired by an affiliate of Sun Capital Partners Inc. for $762 million in February 2008.