Broder Bros. Co., which distributes Anvil, Fruit of the Loom, Gildan, Hanes, Jerzees, adidas Golf and Champion product, has completed its previously-announced financial restructuring through the settlement of its private exchange offer. This restructuring allowed Broder to avoid filing bankruptcy, a move the company said last month it would be forced to make if it was not able to refinance 95% of the companys $225 million debt by the end of business on Thursday, May 14. Although the company is still behind its target figure, it said it was enough to avoid bankruptcy.
The company retired an aggregate of $213.5 million in principal amount of its 11.25% senior notes due 2010 in exchange for $94.9 million in aggregate principal amount of the company's newly issued 12%/15% senior payment-in-kind toggle notes due 2013 and shares of the company's common stock. Those shares in the aggregate represent 96% of its common stock outstanding as of the issuance date. An aggregate of $11.5 million of the existing notes will remain outstanding. As a result of the completion of the restructuring, the company believes that all prior defaults under its existing revolving credit agreement and the existing notes have been cured or waived.
Existing stockholders of the company were issued warrants to purchase shares of the company's common stock representing an aggregate of 12% of the company's fully diluted common stock as of the issuance date. As part of the restructuring, three board members have resigned and will reportedly be replaced by members selected by an ad-hoc committee.