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"We are very concerned with BCBG's liquidity position. The company had $20 million available in cash and its revolving credit line in early January, however it also has a $20 million loan payment due in March."
"Declining sales at Max Rave, which BCBG acquired in 2006, is also likely to push the subsidiary to break minimum earnings before interest, taxes, depreciation and amortization (EBITDA) terms in its loan agreements."
"We do not expect Max Rave to meet its minimum EBITDA covenant. This does not
constitute an immediate event of default but could prove distracting for management. The 2006 acquisition of the Max Rave business added to the company's business risk and it continues to underperform because of negative sales trends."
For all hedge funds trying to DIP their finger into something saucy look no further (wink wink Aladdin). A wacky owner who loves dancing on couches, Fashion week passes for life, models everywhere, and a modest amount of money ahead of a potential loan-to-own. This should pass any investment committee.