Why Cherokee Is Up Over 100 Percent

06:12 08/06/2018

Cherokee Inc. [NASDAQ:CHKE ] today announced that on August 3, 2018, it replaced its former credit facility with a new $40 million three-year financing agreement with Gordon Brothers Finance Company 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 the Company’s former credit facility have increased their subordinated interests by $2.0 million to $13.5 million. Cherokee Global Brands 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 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, chief executive officer 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. Since the start of fiscal 2019, we have hit several benchmarks, including strengthening of our management team, successfully refining our operations and divesting non-royalty businesses. We are now better positioned to realize the full potential of our high-growth brand opportunities with the support of this more focused and efficient infrastructure. On behalf of my associates and our board of directors, I offer thanks to key stakeholders and licensees and retail partners who remained committed to Cherokee Global Brands’ success throughout this process.”

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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