GNC Holdings Inc., a global health and wellness brand, announced on Friday that the early maturities of its largest loans have been extended until the end of the month.
GNC’s Tranche B-2 term loan, FILO term loan and revolving credit facility have early maturities that could have been accelerated to Monday if certain conditions were not met.
Due to the impacts of COVID-19 on its business, GNC would not be able to meet some of these conditions, the company said.
Lenders agreed in May to extend the spring maturities from May 15 to June 15. A condition of that deal was that GNC had liquidity of $ 100 million or more. In the statement released on Friday, GNC did not report its current liquidity or the amount of debt. At the end of March, the company owed $ 895 million. The second term ends on June 30.
The new amendments to the deal were not filed with the Securities and Exchange Commission on Friday, so no further information was immediately available.
The company will continue its attempts to refinance and restructure its debt, according to the press release on Friday. Citing anonymous sources, Bloomberg reported on June 2 that GNC was discussing a debtor-in-use loan. This loan could allow the business to continue operating as it attempts to restructure its debts.
Debt storm, pandemic hits GNC
The urgency of GNC’s financial difficulties began to scream in March, when reported to the SEC that he would not be able to cover what was, at the end of December, a debt of 700 million dollars.
During fiscal year 2019, the company lost $ 35.1 million; it had earned $ 69.8 million in fiscal 2018. The company learned at the end of March that its negotiations with Asian lenders to restructure its debt had collapsed.
The effects of the coronavirus were just beginning, and stay-at-home orders and the resulting mandatory store closings hit GNC like a hurricane. End of April, approximately 40% of its national stores were closed. GNC reported a first quarter net loss of $ 220.1 million.
GNC’s continuing financial woes could cause the New York Stock Exchange to write off the stock, the stock market told the company in April. At that time, his shares, company valuation, and equity were all below rating standards. An average closing price of at least $ 1 for 30 consecutive trading days is required, but GNC has until June 24 to submit a correction plan to the NYSE. From then on, it will have six months to meet the standard.
As of March 16, the stock closed at or above $ 1 per share only on June 8, at $ 1.48. The stock closed at $ 0.95 on Friday, then climbed to $ 1.23 per after-hours share and closed at $ 1.08 at 8 p.m. EDT.