American Apparel May Receive $80 Million from Soros' Firm
Billionaire investor and philanthropist George Soros may be behind a deal that could extend $80 million in credit to American Apparel. As reported by the Los Angeles Business Journal on Monday, a finance company backed by Soros' hedge fund is in talks with the Los Angeles-based apparel supplier to replace and increase its line of credit, currently provided by Bank of America.
Crystal Financial would supply the $80 million line of credit immediately, supplanting a $75 million line from Bank of America which matures in July. Details on the deal were not available, although a piece in the New York Post noted it would be "long term."
In October, it was reported that another refinancing bid for the company was rejected by Lion Capital, the British investment firm that holds an $84 million term loan with American Apparel. According to the Post, Lion Capital has approved Crystal Financial's involvement.
The investment would signal more good news for American Apparel. After a difficult 2011, the company has reported double-digit increases in sales for three consecutive months, and in February also appointed two high-level appointments in Stacey Shulman as chief technology officer and Jordan Schiff as general merchandise manager. The line of credit from Crystal Financial would increase liquidity to take advantage of the positive sales momentum.
Following the report, American Apparel's stock rose 15 cents by the end of trading Monday. As of noon today, the company's stock showed a 34 percent increase from start of the week.
For more information, visit www.americanapparel.net.