NEW YORK--Plaid Clothing Group, which is undergoing a liquidity crisis, said it is close to getting a new banking agreement.
"Plaid is in the process of raising additional equity money and amending its banking agreements within the next couple of weeks," Robert Kueppers, executive vice president, said Tuesday.
"With that in place, we should have adequate liquidity throughout 1995 and beyond," he added.
The company said Friday that its banks have requested new capital be injected into the company to cover a "substantial portion" of the after-tax costs related to its failed bid for GFT SpA. Plaid spent $15.2 million in its pursuit of the Italian manufacturer of designer apparel.
Plaid added that while certain shareholders have indicated they would consider an additional investment, "there can be no assurance that the company will be successful in raising equity."
Plaid lost $10.5 million on sales of $76.3 million in the third quarter ended Oct. 1, and noted that by yearend it would be in violation of its bank agreements.
In addition, Moody's Investors Service downgraded the ratings on about $75 million in Plaid's debt to CAA from Single-B2, citing a weak tailored clothing market and Plaid's deteriorating financial position.
--Fairchild News Service

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus