The Children’s Place secures 78.6 million dollar term loan from majority shareholder

Kidswear retailer The Children’s Place has secured a new financing agreement with majority shareholder Mithaq Capital SPC to provide 78.6 million dollars of interest-free unsecured and subordinated term loans as part of strengthening the company’s liquidity positioning.

The news comes weeks after Saudi Arabia’s Mithaq had snapped up over half of The Children’s Place’s share capital, triggering a change of control at the firm and pushing forward discussions regarding the provision of funding.

Now, Mithaq has further nominated four new individuals to the retailer's board of directors: Turki Saleh A. AlRajhi, who has also been appointed chairman-elect, Muhammad Asif Seemab, Muhammad Umair and Hussan Arshad.

Alongside these appointments, current directors Elizabeth Boland, Alicia Enciso, Katherine Kountze and Wesley McDonald have each resigned from the board.

The board has further formed the Efficiency and Optimisation Committee, composed of Seemab and Umair, as well as president, CEO and director, Jane Elfers, who have been tasked with making recommendations on increasing competitiveness and efficient cost management.

Furthermore, the company is also expecting to be in a position to close on a previously announced 130 million dollar term loan by the Gorden Brothers in March, while alternative forms of financing are also continuing to be pursued.

In a release, The Children’s Place added: “As the company continues to work to improve its liquidity position and strengthen its balance sheet, certain of its vendors and service providers material to the business have informed the company that they have halted or plan to halt service to the company as a result of delayed payments.

“The company is in ongoing dialogue with its vendors and service providers regarding paths forward to ensure continued service, and plans to use a portion of the proceeds from the financings described above to support operations, including payments to vendors and service providers to address overdue accounts payable.”