Printer Friendly

NexCen stabilizing.

NexCen Brands, which has been facing financial setbacks recently, has announced that it has entered into a letter agreement with its lender, BTMU Capital Corporation (BTMUCC), which provides the company with near-term access to certain additional cash from its lockbox accounts and limited forbearance from certain alleged defaults under its bank borrowing facility. During the forbearance period, NexCen, parent company to the MaggieMoo's and Marble Slab Creamery ice cream chains, intends to continue its discussions with BTMUCC, focused on developing a long-term solution for its liquidity issues. This includes the possible sale of some of its holdings, although it appears that its Bill Blass and Waverly brands are more likely to go than the rather recently acquired two ice cream companies.

The letter agreement provides for modifications that include NexCen being permitted to receive certain cash distributions from its lock-box accounts on a monthly, rather than quarterly, basis, following delivery of required reports. In addition, the company's subsidiaries that are party to the bank borrowing facility may distribute certain cash to the company to support operating activities in the ordinary course, including previously restricted cash that will be released from certain lock-box accounts.

NexCen has also agreed to provide BTMUCC with monthly, rather than quarterly, reports on its operations and cash flow and additional weekly or biweekly status reports regarding cash flows, cost reductions, potential sales of one or more of its businesses and other business matters. The letter agreement's forbearance period extends through July 17, 2008, although it terminates earlier if new defaults occur.

Robert W. D'Loren, CEO of NexCen Brands, noted, "We're very pleased to have reached an agreement with BTMUCC that provides the company with additional near-term financial flexibility. Securing a long-term solution to the company's liquidity requirements remains one of management's top priorities and this agreement is an important step in enabling us to continue to implement our operating plans for both our license and franchise businesses."

The company further reports that it is working to reach agreement with BTMUCC on a comprehensive restructuring of the bank borrowing facility including, among other things, obtaining relief from an accelerated principal payment obligation in October 2008. NexCen has issued the caveat that "No such agreement has yet been reached, and there can be no assurance that any agreement will be reached and approved by the parties by July 17, 2008, or at all, on terms that will provide the company with the additional liquidity it needs to operate its business."

As previously announced, NexCen has engaged N M Rothschild & Sons Limited to explore strategic alternatives, including the possible sale of one or more of its businesses. The company has received numerous expressions of interest in both the Bill Blass and Waverly brands from domestic and international strategic and financial buyers and is working with Rothschild to evaluate possible transactions.

"We remain committed to providing all of our business partners with the highest level of service, including those working with our Bill Blass and Waverly brands," continued Mr. D'Loren. "We also continue to explore all options that will enhance liquidity for our operations."

There has been no specific references to any sale of the company's two ice cream brands, MaggieMoo's and Marble Slab Creamery of its other food holdings which include Pretzel Time, Pretzelmaker, and Great American Cookies. NexCen's other holdings are the retail footwear and accessories chains The Athlete's Foot and Shoebox New York.

NexCen Brands additionally announced that, since commencing its cost-reduction efforts four weeks ago, the company has eliminated approximately 10% of its total workforce, with staff reductions at both its New York and Georgia operations. These reductions in payroll and salary deferrals are expected to reduce cash outlays by approximately $3.5 million on an annualized basis, and additional expense savings are anticipated.
COPYRIGHT 2008 Ice Cream Reporter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2008 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Ice Cream Reporter
Date:Jul 20, 2008
Previous Article:Blue Bell touts non-shrinkage.
Next Article:Marble Slab in Kuwait.

Related Articles
Joint acquisition of MaggieMoo's and Marble Slab.
NexCen adds pretzels to ice cream.
NexCen adds Great American Cookies.
NexCen co-brands Marble Slab and Pretzelmaker.
NexCen faces setbacks and lawsuits.
Marble Slab in Kuwait.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |