Tefron Ltd., an Israeli company that specializes in manufacturing seamless and engineered apparel for brands such as Patagonia, Nike, Lululemon Athletica and Reebok, said it signed a Memorandum of Understanding (MOU) with its principal lenders to continue and expand its line of credit.
The MOU, signed on Jan. 6, 2010 with Bank Leumi le-Israel Ltd., Bank Discount le-Israel Ltd. and Bank Hapoalim Ltd. effectively ends a month of financial uncertainty for Tefron.
“With the signing of the MOU, we have removed the last element of doubt about Tefron’s financial picture. This closes the chapter on what has clearly been a challenging month for our company,” said Jacob Gelbard, Chairman, Tefron Ltd.
The MOU ensures the continuation of the existing $28.95 million line of credit and adds an additional $1.8 million for a total credit line of US $30.8 million. The MOU also calls for the addition of a minimum of $4 million in equity investment an investment major shareholders have committed to make at an upcoming rights offering.
“This successful resolution of our financial challenges allows Tefron to focus on the most urgent work: executing our turnaround plan and meeting customer needs with superior products,” said Gelbard. “The continued loyalty and support of those customers and our industry-leading technology and innovation were clearly key in reaching this agreement with our financial partners.”
Founded in 1977 and based in Misgav, Israel, Tefron manufactures boutique-quality everyday seamless intimate apparel, active wear and swim wear sold throughout the world by such name-brand marketers as Victoria's Secret, Nike, Target, The Gap, Banana Republic, J. C. Penney, Lululemon Athletica, Warnaco/Calvin Klein, Patagonia, Reebok and El Corte Englese, as well as other well known retailers and designer labels. The company's innovative product line includes knitted briefs, bras, tank tops, boxers, leggings, crop, T-shirts, nightwear, bodysuits, swimwear, beach wear and active-wear.
