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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: TeamTi who wrote (11513)	4/17/2003 7:57:21 PM
From: RockyBalboa	Respond to of 19428

FAO! - Gets new financing, stock hits 80c, ends at 55c. UPDATE - Bankrupt FAO gets financing to stay in business Thursday April 17, 5:48 pm ET By Angela Moore (Adds details, background, quote, byline) NEW YORK, April 17 (Reuters) - Bankrupt FAO Inc. (NasdaqNM:FAOOQ - News), parent of the FAO Schwarz toy store, said on Thursday it got necessary financing to keep its doors open, helped by investors who will buy $30 million of its convertible preferred stock, and it plans to emerge from bankruptcy next week. ADVERTISEMENT The financing comes just days after the company said it lost the funding it needed to emerge from bankruptcy and may have to shut down. The group of lenders and investors includes Fleet Retail Finance, Hancock Partners, Kayne Anderson Capital Advisors and Saks Inc. (NYSE:SKS - News). Fred Kayne is the chairman of FAO. Earlier this year, department store operators Saks said it would open toy shops in most of its department stores and it would buy a stake in FAO. FAO also said on Thursday its right to use cash collateral has been extended through April 24, and it expects its confirmed plan of reorganization to become effective early next week. At that point the company will emerge from bankruptcy and begin making distributions to creditors under terms of the plan. Shares of FAO closed up 6 cents, or 43 percent, at 20 cents per share, on Thursday. On April 7, FAO said it had arranged for $77 million to fund its emergence from bankruptcy, which had been set for Friday, April 18. A week later, the company said it lost the financing and its right to use cash that is collateral for its loans was set to expire, unless extended by the lenders. The retailer, which also runs the Zany Brainy and Right Start chains, had said it was exploring alternatives, including obtaining replacement equity funding in order to complete its confirmed plan, a sale of all or portions of its operations, and liquidation. "It's highly beneficial for the toy industry that FAO Inc. avoided Chapter 7," said Jim Silver, industry expert and publisher of Toy Wishes magazine. "FAO and Zany Brainy are important for the smaller manufacturers and the upscale boutiques, they're often called a breeding ground for smaller companies," he said. "Without FAO smaller companies wouldn't be able to get off the ground." Niche toy retailers like FAO have suffered from the growth of national chains like Wal-Mart Stores Inc. (NYSE:WMT - News), Target Corp. (NYSE:TGT - News) and Toys R Us (NYSE:TOY - News), which have massive buying power and often sell the same merchandise at a discount. FAO filed for bankruptcy protection in January after a weak holiday season. FAO Inc. was formed last year when FAO Schwarz toy chain was acquired by The Right Start, which had bought Zany Brainy out of bankruptcy in 2001.