Zale Corp. negotiated some crucial breathing room Monday, securing a $150 million five-year senior secured loan from Golden Gate Capital, which will receive warrants to purchase a quarter of the firm’s common stock once shareholders approve the deal.


The San Francisco-based private equity company also secured two seats on the jeweler’s board, which were filled by Express chairman Stefan Kaluzny and Golden Gate principal Peter Morrow. Additionally, Zale chairman John B. Lowe Jr. said he would not run for reelection as a director when his term expires at the next annual meeting. Two other directors, Thomas Shull and David Szymanski, have resigned their seats on the board.


“With the completion of our financial restructuring, we will now be able to focus 100 percent of our time on key merchandising, in-store and marketing initiatives to grow sales and return to profitability,” said Theo Killion, president and interim chief executive officer.


The company also amended and extended its bank credit facility.


After using the Golden Gate loan to repay debt under its existing bank agreement, Zale expects to have $160 million in outstanding debt and available liquidity of $250 million.

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