Broder Bros. Co. warned that it will have to file for Chapter 11
bankruptcy unless it can exchange $225 million in existing debt for new
debt and stock by mid-May. For each $1,000 in old notes paying 11.25
percent and due Oct. 15, 2010, the company said, it will give new notes
valued at $444.44 and paying 12 percent to 15 percent and due in 2013.
In addition, investors will receive shares of newly issued common stock.
Privately held Broder, which sells imprintable sportswear, said the
move is intended to reduce its leverage, extend the maturity of its
senior debt, decrease interest expenses, and enhance near-term
liquidity.
If the company “”fails to secure the participation of at least 98% of
the Old Notes or does not consummate the Exchange Offer for any reason,
it intends to initiate a restructuring through the filing of a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.”
Via its three divisions, Broder Bros.y distributes industry-leading
brands Anvil, Fruit of the Loom, Gildan, Hanes and Jerzees as well as
exclusive retail brands Adidas Golf, Champion and Columbia.
