DANSKIN ARRANGES TO RAISE CAPITAL BY $20 MILLION

NEW YORK — Danskin Inc., which has been reeling under a burdensome debt load, has concluded a series of new financing agreements that should increase its capital by about $20 million.
In addition to the funding, the deal brings some heavy hitters to its expanded board, including David Chu, president and chief executive officer of Nautica International, and Nina McLemore, managing partner of Regent Capital Partners and former president of the accessories unit at Liz Claiborne.
Both are investors in Danskin Investors, a group formed by Onyx Partners Inc. McLemore will serve as vice chairman of the board.
Among the items, Danskin Investors Inc. has put $15 million in new capital into Danskin and stands ready to buy any unsold shares in a planned $3 million rights offering to Danskin shareholders.
For its investment, the new group will get control of the board and a majority of the equity in the refinanced company.
As part of the refinancing, Danskin has obtained a $45 million secured credit facility with Century Business Credit Corp. Century will provide a $45 million revolving credit line and $10 million in term loans.
Other members being added to the Danskin board, all of whom are participants in the investment by Danskin Investors are:
Michael Hsieh, president of LF International Inc., a venture capital firm of Li & Fung, Hong Kong-based trading company; Andrew Astrachan, president and founder of Onyx Partners; Gabriel Brener of the Brener Group, a family investment fund with various interests, including a former interest in Groupo Syncho, a Mexican hosiery manufacturer; and Jim Jalil, representing Alpine Associates.
Donald Schupak, who continues as Danskin chairman of the board, called Chu one of the most talented members of the apparel industry, adding that “his guidance in development of brand strategy” will further Danskin’s growth plans.
Mary Ann Domuracki, president and chief executive officer, said the new financing will relieve Danskin of the “excessive debt levels it has carried in recent years” and will allow management and the new board “to turn their full attention to the opportunities that exist in the marketplace.”
In addition to $12 million in 8 percent preferred stock convertible into Danskin common at 30 cents a share and $3 million in subordinated debt of Danskin, the new investment group received warrants to buy 10 million Danskin shares for 30 cents a share.
Danskin stock closed Thursday at 1, down 1/16, in over-the-counter trading.
In the six months ended June 28, Danskin’s interest expenses of $2.4 million equaled the net loss for the period before preferred dividends. Sales were $60.3 million, down slightly from the year-ago period. The balance sheet as of June 28 showed shareholders equity with a deficit of $1.6 million.
Danskin makes and markets women’s activewear and dancewear under the Danskin and Dance France labels and its Pennaco Hosiery division makes legwear under the Danskin, Anne Klein, Givenchy and Round the Clock marks and also under private label.

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