American Apparel Rumored Close to Receiving $15 Million Investment
Los Angeles-based American Apparel is in the process of approving a deal to give the company a cash infusion and keep it solvent, Bloomberg is reporting. According to people familiar with the process, who chose to remain nameless, American Apparel's board has given approval for a $15 million deal with a group of private investors.
The sources told Bloomberg the terms, which will not be made public, include new stock warrants and could be worth as much as $40 million.
On April 1, the clothing company submitted it's regulatory filings to the U.S. Security and Exchange Commission earnings report, where it claimed an $86.3 million net loss and indicated it may need to file for bankruptcy protection if revenue did not increase. A week later, Reuters reported rumors that American Apparel was looking for a buyer. The investment should ease concerns and enable the company to remain stable.
The company will allegedly sell stock to the investors at $0.90 a share, a discount from Wednesday's closing price of $1.21. As of of 2:30 p.m. today, American Apparel's stock had seen a 8.2 percent increase to $1.31.