Global Brands Group has accomplished the sale of its Spyder division in South Korea to a personal fairness agency and can use the $19.5 million raised to assist it proceed to function because it negotiates with lenders over mounting past-due money owed.
On Thursday morning, the Hong Kong-based firm mentioned that whereas the preliminary plan was to make use of the proceeds from the sale of Global Brands Group Korea Ltd. to repay a part of its present financial institution debt, the state of affairs has modified.
Global Brands Group had beforehand reported a web loss after tax of $120 million for the six months ended Sept. 30, 2020. The firm mentioned its liabilities exceeded its belongings by $899 million at the moment. Included amongst its liabilities have been loans of $281 million, commerce payables to exterior events of $374 million and commerce payables to associated firms of $627 million. The commerce payables are late.
The firm reiterated Thursday what it had mentioned prior to now that these money owed “may cast significant doubt about the group’s ability to continue as a going concern.” It added that it has “been pursuing a number of measures to generate adequate financing and operating cash flows” with a view to proceed working.
“The ongoing pandemic and geopolitical uncertainties, as well as structural shifts in the retail industry continue to inhibit the group’s initiatives to improve its financial position,” GBG mentioned Thursday.
“As the group approaches its peak season for the shipment of goods to its customers and in light of the group’s liquidity situation,” it’s within the “best interest of the company and its shareholders…to explore retaining all or part of the net proceeds to fund the group’s operations instead of applying the full amount to pay down the bank debt” and it has “commenced discussions with the lenders to amend its repayment obligations.”
As a part of these discussions, GBG has agreed to switch the proceeds of the South Korean sale into an account that the lenders will management and can search the consent of the lenders for withdrawals to fund its continued operations.
It additionally warned potential traders that they need to “exercise caution when dealing in the shares of the company.”
In April, GBG entered into a purchase order settlement with Alpha Vista Investment Co. Ltd., a personal fairness agency in Korea, for its Spyder enterprise in Korea for $40 million. Spyder is owned by Authentic Brands Group, which licensed the South Korean division to GBG. ABG gave its blessing to the deal because the identical administration crew will stay in place following the sale, the corporate informed WWD.
According to GBG, the Spyder enterprise in Korea contributed about $70.5 million to its complete income in the course of the nine-month interval ended Dec. 31, 2020, in comparison with the $472.9 million achieved by means of its different companies.