CONE SEEKS FINANCING ADVICE
Byline: Scott Malone
NEW YORK — With an eye toward expanding its presence in Mexico, Cone Mills Corp. on Tuesday said it had hired J.P. Morgan “to provide guidance on all aspects of its strategic plan and capital structure.”
Gary Smith, executive vice president and chief financial officer at Cone, explained that the company will have J.P. Morgan look closely at its debt structure.
“We’ve talked for some time about wanting to begin our expansion in Mexico with our new denim plant. Back in December, we announced that we plan to expand that,” he said, adding that the company also wants to start building a wholly owned denim plant in Tamaulipas, Mexico. “But right now, given our present financial structure, we’re really unable to start that.”
The company plans to expand the capacity of its five-year-old Parras-Cone joint venture by about 35 percent, which Cone said it expected to cost about $18 million, as reported.
The potential Tamaulipas plant would be located in an industrial park that Cone co-owns with Guilford Mills Inc. in the Mexican state.
Smith acknowledged that the Greensboro, N.C.-based textile producer doesn’t know how long it might take it to find a way to finance its expansion in Mexico.
“There may not be immediate options,” he said. “It may be, given what the markets are today, that there is a period of time before anything comes to the forefront.”
As of Dec. 31, Cone’s balance sheet showed $423.2 million in total liabilities and stockholder equity, including $108.6 million in long-term debt.
For fiscal 2000, the mill recorded a net loss of $25.3 million on sales of $617.7 million.