HANNOVER, GERMANY - Furniture manufacturer Ethan Allen Interiors Inc (NYSE:ETH) opened a showroom at retailer Möbel Hesse in Hannover, Germany on September 17, during Möbel Hesse’s 70-year anniversary. Möbel Hesse is the region’s premier design destination, with 500,000 square feet and dozens of showrooms from home design brands around the world.
The Ethan Allen also opened a new store in Qatar, in the Middle East, and a new design center in McCandless, PA, a replacement for a former location in Wexford, PA.
Ethan Allen CEO Farooq Kathwari responded to Thomas Sandell's complaint, whose group owns 5.5% of Ethan Allen and claims "sub-optimal fiscal policies and inefficient allocation of shareholder capital."
The expansions come as Ethan Allen is pursued by an investor who would like to take over the firm. Earlier in September Ethan Allen announce it was seeking more liquidity to fend off the buyer.
CEO Kathwari says that since last fall, "the Company has been in discussions with our bankers to enhance our capital structure. The first objective was to put in place a new $115 million revolving credit facility to replace the $50 million revolving facility that was scheduled to expire in June 2015. This objective was accomplished in October 2014. The next objective was to redeem the $129 million of outstanding senior notes due October 2015, which was completed in March 2015.
"We also engaged J.P. Morgan Securities LLC to explore alternatives to raise up to $250 million in long-term debt financing. The funds will be utilized for our general corporate needs and to further increase shareholder returns including a special dividend and share repurchases. The Company expects to determine and announce the specific application of the proceeds in the next several weeks."
Meanwhile, Andrews & Springer, a Delaware law firm that specializes in creating class action suits on behalf of shareholders announced it was seeking interested parties among Ethan Allen shareholders, to launch a suit.
Ethan Allen Interiors Inc. operates 300 Design Centers in the United States and abroad, and owns and operates eight manufacturing facilities including five manufacturing plants and one sawmill in the United States, plus one plant each in Mexico and Honduras. Approximately seventy percent of its products are made in its North American plants.
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