Israeli company Tefron manufactures boutique-quality everyday seamless intimate apparel, active wear and swim wear sold throughout the world by name-brand marketers such as Calvin Klein, Nike, Victoria’s Secret, Patagonia, Reebok, Banana Republic and the Gap. The company’s innovative product line includes tank tops, boxers, leggings, crop, T-shirts, nightwear and bodysuits.
The company announced yesterday that it has signed a memorandum of understanding with its principal lenders to continue and expand its line of credit. The memorandum of understanding ensures the continuation of the existing $28.95 million line of credit and adds an additional $1.8 million for a total credit line of $30.75 million. The memorandum of understanding also calls for the addition of a minimum of $4 million in equity investment. Major shareholders have already committed to make this investment at an upcoming rights offering.
The memorandum, signed on January 6th with Bank Leumi le-Israel Ltd., Bank Discount le-Israel Ltd. and Bank Hapoalim Ltd., effectively ended a month of financial uncertainty for Tefron. The chairman of Tefron, Jacob Gelbard, commented on reaching an agreement with the banks, “With the signing of the memorandum of understanding, we have removed the last element of doubt about Tefron’s financial picture.”
Mr. Gelbard continued, “The successful resolution of our financial challenges allows Tefron to focus on the most urgent work: executing our turnaround plan and meeting customer needs with superior products. The continued loyalty and support of those customers and our industry-leading technology and innovation were clearly key in reaching this agreement with our financial partners.”