American specialty retailer Children's Place receives $48.6 mn funding

The Children’s Place, Inc. (Nasdaq: PLCE), an omni-channel children’s specialty portfolio of brands with an industry-leading digital-first model, today announced that it has received from its majority shareholder, Mithaq Capital SPC (“Mithaq”), the second tranche of interest-free, unsecured and subordinated term loan funding contemplated by the previously announced Unsecured Promissory Note, dated February 29, 2024, entered into between Mithaq and the Company, in the amount of $48.6 million (the “Second Mithaq Term Loan”).

As previously announced, Mithaq provided the initial tranche of $30 million to the Company pursuant to such Unsecured Promissory Note on February 29, 2024, also in the form of an interest-free, unsecured and subordinated term loan (the “Initial Mithaq Term Loan” and together with the Second Mithaq Term Loan, the “Mithaq Term Loans”).  

On March 8, 2024, with the funding of the Second Mithaq Term Loan, the resignations from the Board of Norman Matthews, John E. Bachman, John A. Frascotti, Debby Reiner and Michael Shaffer have become effective and the size of the Board has been reduced to six. Jane Elfers will continue to serve in her role as President, CEO and director of the Company. In addition, the new Board has appointed Douglas Edwards – who served in a number of different roles with Wells Fargo & Company before his retirement in 2022, including Executive Vice President and Interim General Counsel – to serve on the reconstituted Board as an independent director, with immediate effect upon the completion of customary lender due diligence required by the previously announced forbearance agreement entered into by the Company and the other lenders party thereto.

The Company continues to expect to be in a position to close the previously announced $130 million term loan (the “Gordon Brothers Term Loan”) in March 2024, as contemplated by the non-binding term sheet that the Company entered into with 1903P Loan Agent, LLC. The Company is also pursuing improved terms with Gordon Brothers as well as alternative financing on terms no less favorable in the aggregate to the Company.

Turki Saleh A. AlRajhi, chairman of the company and chairman and ceo of Mithaq, commented, “We are pleased to fulfill our commitment to all the Company’s shareholders by providing $78.6 million in funding, which is interest-free, unsecured, and subordinated. We believe that there is a strong alignment of interests between the Board and all shareholders that will help put the Company on a path to strong future free cash flow generation. We also look forward to the addition of Douglas Edwards to our Board as a new independent director, and we are confident that his expertise will be an asset to the Company as we seek to optimize the Company’s finances and operations. As custodians of the Company, with an equity stake representing over 54% of the Company’s common shares, we look forward to continuing to communicate with all fellow shareholders as we proceed down the path of value creation together.”

Note: The content of this press release has not been edited by Fibre2Fashion staff.

Fibre2Fashion News Desk (HU)