Eddie Bauer to be purchased in Ch. 11
-- Home Textiles Today, 6/18/2009 8:44:00 AM
Seattle – Eddie Bauer Holdings, which entered Chapter 11 bankruptcy last week, has entered into a bid agreement with private equity firm CCMP Capital Advisors to be acquired.
The firm -- whose consumer and retail investments have included Cabela's, Guitar Center, 1-800-flowers.com, Quiznos, Pinnacle Foods and Crosstown Traders – plans to keep operating the majority of the company’s 371 stores in the U.S. and Canada. The parties hope to complete the sale process within 60 days.
Eddie Bauer has secured Debtor-in-Possession financing of $900 million on an interim basis and $100 million based on final court order from its existing revolving credit lenders, Bank of America, N.A., GE Capital Corporation and CIT Group/Business Credit, Inc.
In April, the company negotiated an amendment with its senior term loan lenders that provided short-term relief on its loan covenants, but was unable to reach an agreement.
"Eddie Bauer is a good company with a great brand and a bad balance sheet,” said Neil Fiske, Eddie Bauer’s president and ceo. “This process will allow the business to emerge with far less debt, positioned for growth as the economy recovers and as our new products gain traction. We expect this process to be completed very quickly, protecting our employees and critical vendor partners every step of the way.”
Fiske attributed the company’s troubles to “a crushing debt burden placed on the company from the Spiegel reorganization in 2005, combined with the severe, prolonged recession.”
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