NEW YORK -- The latest blow to the financial status of the domestic textile industry came Friday, when the New York Stock Exchange notified knitter Guilford Mills Corp. that its shares face delisting.
Only a few major fabric mills -- among them, Cone Mills, Delta Woodside, Dan River and Galey & Lord -- retain a place on the nation's largest exchange. Most recently, Burlington Industries Inc. was dropped from the NYSE following its bankruptcy filing last month. Galey, however, was warned this fall that it faces delisting and in November filed a plan with the exchange showing that it would meet listing standards in a few months. Delta Woodside was similarly warned in August and is planning a reverse stock split to boost its share price.
Guilford said in a statement that it intends to submit a plan in early January showing how it will meet NYSE standards. It will then have 18 months to bring its stock into compliance. Should the plan fail, Guilford said it expects its shares to trade over the counter. Companies whose shares don't trade above $1 and whose market capitalization falls below $15 million for 30 consecutive days face delisting.
Over the past 52 weeks, the Greensboro, N.C.-based mill's shares have traded as low as 30 cents and as high as $2.44. Monday, shares closed at 63 cents, for a market capitalization of $11.8 million.
Guilford shares traded heavily during the week before the announcement and came close to the $1 mark on Wednesday. According to a source, company executives recently met with Guilford's lenders and convinced them that the company would be on sound financial footing going forward.
Guilford officials were unavailable to comment on Friday.
For most major textile mills, the spectre of bankruptcy has loomed large, as low margins and high debt loads, combined with the downturn in the economy, have led to heavy financial losses.
One of Guilford's rivals, knitter Malden Mills Industries Inc., filed for bankruptcy court protection in late November. Executives at the privately held company said Malden was not profitable in the year ended Oct. 30.
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