WestPoint pays off portion of debt load
December 23, 2002,
Hacking away at a crushing debt load of more than $1.7 billion, textiles giant WestPoint Stevens said it has made a $39 million coupon payment on two series bonds bearing interest at a rate of 7.875 percent.
Holcombe Green Jr., chairman and ceo, said, "We are on plan to see sales increases in the current quarter and for the year vs. the comparable periods for 2001 and expect to see continued inventory and debt reduction."
Acting to quash doubts about WestPoint's financial stability, Green emphasized, "We are comfortable that we will remain in compliance with all of our financial covenants."
At the same time, trying to stave off delisting on the New York Stock Exchange, the company said it has submitted a business plan to the Big Board outlining the steps it's taking to boost its stock price and market capitalization in order to comply with exchange rules for continued listing.
WestPoint was notified earlier this month that its stock faces delisting because it has fallen beneath the $1.00 level for more than 30 consecutive trading days, lowering the company's market capitalization beneath required levels.
WestPoint has asked for a breathing space of 18 months, until April 2004, to get its financial house in order and meet the requirements for continued listing. Under its rules, the New York Stock Exchange can grant an 18-month extension. The exchange has up to 45 days to review the business plan and make its decision. If the company is given the extra time to come into compliance, its results will be monitored on a quarterly basis.
If the decision is unfavorable, and WestPoint's shares are delisted, the company said it believes "that an alternate trading venue will be available."
WestPoint shares closed last Thursday at $0.65 a share, down more than 89 percent from a 52-week high of $6.05 a share.
WestPoint also said that ceo Green has surrendered 3.1 million shares of common stock he owned to Bank of America. The shares had been used to collateralize a loan to WPS Investors, a partnership controlled by Green.