Lycra enters restructuring agreement to reduce $1.2bn debt

Core Viewpoint - Lycra is undergoing a restructuring process through a voluntary prepackaged Chapter 11 filing to establish a sustainable capital structure aimed at recapitalizing the company and enhancing financial stability [1][2]. Group 1: Restructuring Process - The restructuring plan has received near-unanimous support from stakeholders, including holders of senior secured term loans and notes, and is expected to conclude within 45 days [2]. - Lycra is seeking "first day" relief from the court to maintain regular business operations during the restructuring, ensuring that all valid debts to suppliers and vendors will be paid in full [3]. Group 2: Financial Support - The company has secured $75 million in debtor-in-possession financing and anticipates over $75 million in exit financing to support ongoing operations and refinance the debtor-in-possession funds post-Chapter 11 [3][4]. - Certain entities of Lycra are excluded from the Chapter 11 filing, indicating a selective approach to the restructuring [4]. Group 3: Leadership and Future Outlook - CEO Gary Smith emphasized the importance of this restructuring as a significant milestone for reducing debt and strengthening the company's financial foundation while continuing to serve customers and partners [5]. - The company has engaged various advisors, including Linklaters, Haynes Boone, Houlihan Lokey, and FTI Consulting, to assist in the restructuring process [5]. Group 4: Recent Developments - In November of the previous year, Lycra opened its largest spandex production facility in China, reflecting ongoing investment in the Chinese market [6].