CHAUS OFFERING PLANNED TO RAISE UP TO $20 MILLION
NEW YORK — Bernard Chaus Inc. on Monday announced a restructuring plan under which it intends to convert a substantial portion of its debt to equity and raise up to $20 million through a common stock rights offering.
Josephine Chaus, chairwoman, majority shareholder and co-founder, has agreed to exchange $39.7 million in debt owed to her for equity, increasing her stake in the troubled women’s sportswear and dress manufacturer to 90 percent from 56 percent previously, the company said.
In addition, the chairwoman has agreed to acquire $12.5 million in new stock issued in a rights offering for up to $20 million in stock. If other shareholders fully subscribe to the offering, the chairwoman would only acquire $10 million in new stock.
Chaus closed Monday at 1 5/8, unchanged on the New York Stock Exchange. The news came out after the market closed.
The manufacture of the Chaus and licensed Nautica women’s lines lost $3.2 million in the nine months ended March 31 on sales of $42.9 million.