EAST RUTHERFORD, NJ - Kid Brands Inc., an importer of juvenile furniture and other children's products, has secured a maximum $80 million revolving credit faclity to shore up its cash flow.
The credit deal inked with Salus Capital Partners LLC came one day after Kid Brands announced it would submit a plan to restore its market capitalization to the $50 million minimum required to be listed on the New York Stock Exchange (NYSE).
Kid Brands immediately used $55.3 million of the new loan due Dec. 21, 2016, to pay off a previous credit agreement.
Guy Paglinco, CFO of Kid Brands, said, "We are very pleased with this new credit facility, which provides Kid Brands with improved financial flexibility, as well as with the relationship we have established with Salus Capital."
In its quarterly statement for Sept. 30, 2012, Kid Brands reported stockholders equity of $40.5 million, $9.5 million below the average market capitalization required by NYSE to continue having its stock listed. The company said it would submit a plan by Jan. 28 that it " believes will demonstrate its ability to attain compliance, within 18 months, with the continued listing standards of the NYSE."
If the NYSE accepts Kid Brand's plan, the company's common stock will continue to be listed on the NYSE during the 18-month cure period, subject to the compliance with other NYSE continued listing standards and quarterly review by the NYSE staff for compliance with this plan. If the plan is not submitted on a timely basis, is not accepted by the NYSE, or is accepted by the NYSE but the company does not make progress consistent with the plan during the plan period, the company will be subject to delisting proceedings.
Late last month, Furniture Brands International also received a delisting warning from the NYSE after its average daily stock price fell below the $1 minimum required under NYSE listinig rules.
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