TEXFI TO SELL ITS MARION UNIT TO COMPANY OF FORMER CEO
NEW YORK — Texfi Industries said Monday it has agreed to sell its Marion Fabrics gray goods facility to a new company headed by Texfi’s former chairman, chief executive officer and president, L. Terrell Sovey Jr. Sovey retired as ceo last October and resigned from Texfi’s board of directors Friday.
The sale is subject to certain conditions, including approval by Texfi’s board and acquisition of debt financing by the buyer. The sale price of about $10.7 million, which includes all property, plant, equipment and inventory, is subject to an inventory adjustment at the time of closing, which is anticipated to be on or about March 17. Marion Fabrics, Marion, N.C., had sales of approximately $38.9 million in 1994 and operating losses of $1 million.
“The sale of Marion is an additional step forward in our plan to concentrate on our core textile and apparel divisions,” said William Remley, Texfi’s ceo. “In addition, the cash from the sale of Marion plus the liquidation of the accounts receivable will enable the company to reduce its long-term debt and factor advances by approximately $15 million as well as reduce annual interest expense by $1.4 million.”
Texfi had 1994 net sales of $283 million. In July, Forstmann & Co. had signed a letter of intent to acquire Marion for an estimated $14 million-$15 million. However, in September, citing “difficult conditions in the equity market,” Forstmann called off the deal.