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JPMorgan Agents Facility Amendment for Elizabeth Arden, Inc.

August 03, 2016, 09:11 AM
Filed Under: Consumer Products

On July 26, 2016, Elizabeth Arden, Inc. and certain of its foreign subsidiaries entered into an amendment and restatement of its existing credit facility with a syndicate of banks, for which JP Morgan Chase bank is the administrative agent (the “Amended Credit Facility”). The Amended Credit Facility was entered into in order to permit certain of the Company’s foreign subsidiaries to make borrowings under the Amended Credit Facility and to secure such borrowings with certain assets of such subsidiaries.

The Amended Credit Facility now provides for the following:

  • a Canadian senior secured revolving credit sub-facility (the “Canadian Sub-Facility”) in an aggregate amount of up to US$15 million, secured by a first perfected security interest in the accounts receivable and certain other assets of the Company’s subsidiary in Canada, Elizabeth Arden (Canada) Limited (“EA Canada”), and in the outstanding equity interests in EA Canada;
  • a European senior secured revolving credit sub-facility (the “European Sub-Facility”) in an aggregate amount of up to US$100 million, secured by (a) a first perfected security interest in the accounts receivable and certain other assets of the Company’s subsidiaries in Switzerland and the United Kingdom, Elizabeth Arden International Sárl (“EAISA”) and Elizabeth Arden (UK) Ltd. (“EA UK”), respectively, (b) a floating charge over all assets of EA UK, (c) the inventory of EAISA located in the Netherlands and the U.S., and (d) the outstanding equity interests of EAISA, EA UK, Elizabeth Arden (Netherlands) Holding B.V. (“EA Netherlands Holding”) and Elizabeth Arden (Switzerland) Holding Sárl (“EA Swiss Holding”) (subject to certain limitations with respect to entities deemed to be “controlled foreign corporation” holding companies as described in the Amended Credit Facility);
  • the ability to add the Company’s subsidiary in Germany, Elizabeth Arden GmbH (“EA Germany”), as a borrower under the Amended Credit Facility and to include EA Germany’s accounts receivable in the applicable borrowing base for the European Sub-Facility, subject to a first perfected security interest in EA Germany’s accounts receivable;
  • guarantees of the borrowings of EA Canada by the Company, all of the Company’s material U.S. subsidiaries, and subject to local law restrictions, EA Swiss Holding, EA Netherlands Holding, EA UK, and EAISA; and
  • guarantees of the borrowings of EA UK and EAISA, by the Company, all of the Company’s material U.S. subsidiaries, and subject to local law restrictions, EA Swiss Holding, EA Netherlands Holding, and EA Canada.

U.S. borrowings under the Amended Credit Facility continue to be guaranteed by all of the Company’s material U.S. subsidiaries and to be collateralized by a first priority lien on all of its U.S. accounts receivable and U.S. inventory. No assets of any of the Company’s foreign subsidiaries secure any U.S. borrowings under the Amended Credit Facility.

Borrowings under the Amended Credit Facility are limited to 85% of eligible accounts receivable and 85% of the appraised net liquidation value of applicable inventory, as determined pursuant to the terms of the Amended Credit Facility; provided, however, that from August 15 to October 31 of each year, the Company’s U.S. borrowing base may be temporarily increased by up to $25 million. The borrowing bases under the Amended Credit Facility are subject to certain reserves as provided in the Amended Credit Facility, including, after March 31, 2017, an aggregate reserve against the borrowing bases of EAISA, EA UK, and if added as a borrower under the Amended Credit Facility, EA Germany, in an amount of US$15 million; provided that in the event that the Company has a debt service pricing ratio under the Amended Credit Facility as of the end of any fiscal quarter ending on or after June 30, 2017 equal to or greater than 1.00 to 1.00, such reserve shall fall to $0.







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