American Apparel (stock symbol: [t]APP[/t]) gets a lifeline:
American Apparel Jumps 68% After $80 Million Lion Investment
By Greg Bensinger
March 13 (Bloomberg) -- American Apparel Inc., the retailer known for its racy ads, rose the most in at least two years in NYSE Amex trading after getting $80 million from Lion Capital LLP to pay off a credit facility with SOF Investments LP.
Lion Capital, based in London, will receive notes with a coupon of 15 percent, as well as detachable warrants equal to 16 million shares, American Apparel said today in a statement. If converted, the warrants would equal about 18 percent ownership of the Los Angeles-based clothing chain.
The proceeds will be used to retire outstanding obligations under a facility with SOF Investments, American Apparel said in the statement. SOF is an affiliate of New York-based MSD Capital LP, controlled by Michael Dell, chief executive officer of computer maker Dell Inc.
Jacob Capps, a director at Lion Capital, and Neil Richardson, a partner, will join American Apparel’s board.
American Apparel climbed $1.01, or 68 percent, to $2.50 at 4 p.m. New York time on the NYSE Amex exchange, the biggest jump since at least March 2006. Before today, the shares had declined 25 percent this year.
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net
Last Updated: March 13, 2009 16:06 EDT
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