TULTEX SLATES $115M OFFERING TO REALIGN DEBT
Byline: Carol Emert
WASHINGTON — Tultex Corp., Martinsville, Va., is restructuring its finances with a $115 million offering of senior notes due in 2005, according to a registration statement filed with the Securities and Exchange Commission this week.
Over the last two years, Tultex has violated financial covenants of a term loan due July 31, 1996, a revolving credit facility and 8 7/8 percent senior notes due July 1, 1999, the filing said. The new debt will have a longer maturity and more flexibility, it said.
Tultex has also agreed to a new three-year, $225 million revolving loan facility to replace a facility for the same amount that expires Oct. 6 of this year. The new interest rate will range between prime plus 0.5 percent and prime plus 1.625 percent.
Tultex will take a charge against earnings to offset the costs of terminating its earlier arrangements, the filing said. The charge would have totaled $5.5 million as of Oct. 1, 1994.
Rising raw materials prices, industry competition and a declining market for activewear contributed to a net loss of $548,000 in the first three quarters of 1994, compared to net income of $3.7 million in the comparable 1993 period, the filing pointed out.
During the second quarter of 1994, the company suspended dividend payments on its preferred and common stock, it added.
The deal is being underwritten by J.P. Morgan Securities Inc. and Nationsbanc Capital Markets Inc. A company spokesman said Tultex’s sales mix is 69 percent men’s; 16 percent women’s, and 15 percent youths’ and children’s. — Fairchild News Service