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LOS ANGELES, United States — American Apparel Inc., facing looming debt payments, plans to sell $30.5 million of its common stock, giving the retailer more of a financial cushion to turn around the unprofitable business.
The money will help cover payments due next month on its senior secured notes, the Los Angeles-based company said today in a statement. American Apparel also will grant its underwriters a 30-day option to buy as much as $4.58 million in additional shares. Roth Capital Partners is managing the offering, with assistance from Brean Capital.
American Apparel also posted a net loss $107 million, or 97 cents a share, for 2013, compared with a loss of $37 million, or 35 cents, the previous year. The chain, run by founder and Chief Executive Officer Dov Charney, blamed refinancing expenses, the transition to a new distribution center and the cost of equipment.
Last month, the company’s bondholders hired advisers as they braced for a restructuring, people familiar with the situation said at the time. Creditors who are owed about $206 million retained the firms Houlihan Lokey and Milbank, Tweed, Hadley & McCloy LLP, the people said. American Apparel, which started trading publicly in 2007, has confronted occasional cash shortfalls since 2009.
By Nick Turner 
