Cherokee Global Brands replaced its former credit facility with a new $40 million three-year financing agreement with Gordon Brothers Finance and Gordon Brothers and new subordinated promissory notes with existing subordinated lenders.
As a result of the refinancing, the company’s senior lender has been replaced, and holders of junior participation interests in Cherokee’s former credit facility have increased their subordinated interests by $2 million to $13.5 million.
Cherokee increased its long-term debt from $45.2 million to $53.5 million, which, after discounts and issuance costs, will increase the company’s overall liquidity by approximately $5.5 million. The company also issued warrants to purchase approximately 2.8 million shares of common stock to the senior and junior lenders at an average exercise price of $0.48 per share in connection with the refinancing.
“Completing this refinancing on favorable terms marks a significant step forward for the company and our global licensing partners and shareholders,” commented Henry Stupp, CEO of Cherokee Global Brands. “The new facility increases our financial flexibility, adding over $5 million in liquidity which will support the company’s ability to realize its strategic objectives.”
Houlihan-Lokey, Berkeley Research Group and Mintz Levin acted as advisors to the company on the transaction.
Cherokee Global Brands is a global brand marketing platform that manages a portfolio of fashion and lifestyle brands, including Cherokee, Carole Little, Tony Hawk Signature Apparel and Hawk Brands, Liz Lange, Everyday California, Sideout, Hi-Tec, Magnum, 50 Peaks and Interceptor.
