American Apparel APP gained as much as two percent in pre-market activity Wednesday on news the company was near to completing a $25 million bail-out deal with hedge fund Standard General.
American signed a preliminary deal to that effect on Monday after Standard had gained a 44 percent stake in the company. Bloomberg reported Wednesday that a final agreement is nearly completed.
Terms of the agreement are expected to enable American Apparel to pay off a $10 million loan from Lion Capital on which it had defaulted. The default jeopardized larger amounts of financing for the retailer.
The deal isn't expected to immediately resolve the future of company founder Dov Charney, ousted last month amid accusations of misuse of company funds and sexual misconduct.
American Apparel is trading about even from Tuesday's close early in Wednesday's session.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.