Performance Sports Group gets reprieve on financial filing
Creditors OK extension on financial statements for a higher interest rate
Performance Sports Group has been given a 60-day extension by creditors to file its financial statement, putting off a possible default on hundreds of millions of dollars in loans until at least Oct. 28.
To do so, the Exeter-based sports equipment firm agreed to pay steeper interest rates and issue biweekly reports, as required by Canadian securities regulations.
The company also confirmed reports that it has hired Centerview Partners LLC to conduct “review and evaluation of strategic alternatives and in the Company’s ongoing discussions with its lenders.”
Centerview advises on capital restructuring, which could include bankruptcy reorganization under Chapter 11, according to the New York-based investment banking and advisory firm’s website.
PSG’s stock rose in anticipation of the deal, but the price still stands at less than a fifth of the amount it was selling for in 2014, when the company first started trading on the New York Stock Exchange.
The company, which is conducting an internal investigation for undisclosed reason, is the subject of investigations by the SEC and Canadian authorities and is a defendant in a consolidated class action suit in New York. The plaintiffs charge that the firm pressured retailers into ordering merchandise to artificially inflate revenue and mislead investors.
PSG had a grace period that ended Wednesday before it would have defaulted on loans, since the terms of the loans require timely filings. To obtain the extension, it agreed to pay another 1.5 percent margin (1 percent of which was payable in kind) on its term interest rate and an extra revolving half-percent margin.
in addition, PSG said it applied to Canadian regulators for something called a “management cease trade order,” an alternative that allows the company to continue to be traded in Canada as long as it issues “default status reports” every two weeks.