KHEPRA NEGOTIATING FUNDS TO FACILITATE CHAP. 11 EXIT
Byline: Vicki M. Young
NEW YORK — Khepra Beauty Group, which resumed operations last November after being forced into involuntary bankruptcy, is getting ready to emerge from bankruptcy proceedings.
Byron D. Donics, Khepra’s chairman, said Thursday the company is in “advanced negotiations” for recapitalization.
Donics declined to name the firm that will provide funding to Khepra. He did say that Khepra has a “letter of intent from the underwriters outlining the total equity infusion.” He said the new capital would be in the range of $6 million to $6.5 million.
Donics said the money will be used to pay off all of Khepra’s creditors. Even after those payments, he said, there still will be a “significant amount of capitalization in Khepra to fund ongoing operations and new brand development.”
Joseph F. Ingrassia, partner at Capstone & Co., a venture capital firm, confirmed the existence of the letter of intent. He said that once the deal is completed, Khepra will be able to put together its plan of reorganization to exit bankruptcy proceedings. Capstone provided Khepra with $5.5 million to restart the company back in October. He declined to comment on whether Capstone is the source of the new funding.
The original involuntary bankruptcy petition against Khepra was converted to a Chapter 11 proceeding. However, the U.S. trustee moved to return the case to a liquidation proceeding because, she said, financial reports were inadequate.
Donics said Thursday that he has met with the trustee, and the matter will be resolved once the required paperwork is filed on Tuesday.
Donics also said Khepra has been profitable since resuming operations in November. He noted that the company has a strong spring promotion plan for its Euroitalia and Adrienne Vittadini group of brands and is shipping to major retailers, including the Federated Group, Dayton-Hudson, Marshall Field, Neiman Marcus Group, Nordstrom and Carson Pirie Scott.
Khepra’s current fragrance business includes AV by Adrienne Vittadini; the Euroitalia brands of Dolce & Gabbana; Joseph Abboud, and three Franco Moschino fragrances. —