Ethan Allen Plans $250M of Debt Financing

September 3, 2015  by in Financial Reports, Industry   

Farooq Kathwari, chairman and CEO, said the company has been in conversation with bankers to enhance its 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,” he said. “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.”

Ethan Allen has also employed J.P. Morgan Securities to look into alternatives to raising up to $250 million in debt financing. The money would be used for general corporate needs and to increase shareholder returns, including a special dividend and share repurchases, Kathwari said.

The debt financing transaction should be completed in the company’s fiscal second quarter. The company did caution that that “there could be no assurances that the transaction would be completed” during that time frame.