DJ Sequential Brands Shares Rise 10% After Tuesday Sell-Off
By Chris Wack
Sequential Brands Group Inc. shares were up 10%, to $5.66, after the company said that, as a result of its chapter 11 filing and the existing non-compliance due to filing delinquencies, the trading of its common stock would be suspended on Nasdaq on Sept. 9.
The stock ended Tuesday's session down 56%.
The company said a Form 25-NSE would be filed with the U.S. Securities and Exchange Commission which will remove the company's securities from listing and registration on the Nasdaq.
On Tuesday, the company and certain of its subsidiaries began voluntary chapter 11 proceedings. The company received a letter from Nasdaq indicating that it remains delinquent in filing its Form 10-Q for the period ended March 31, as well as for the period ended June 30, and therefore is not in compliance with Nasdaq Rule 5250(c)(1). The additional letter states that the company is required to submit a plan to regain compliance with the rule by Friday, and that any exception to allow the company to regain compliance, if granted, would require compliance by Nov. 22.
On Tuesday, the company said it has determined that, as a result of the significant debt on its corporate balance sheet, it was no longer able to operate its portfolio of brands, and it will pursue the sale of all or substantially all of its assets under Section 363 of the U.S. Bankruptcy Code.
Sequential Brands said it would be obtaining $150 million in debtor-in-possession financing from its existing Term B lenders. The company expects this new financing, together with cash generated from ongoing operations, to provide ample liquidity to support its operations during the sale process.
Sequential has filed a number of customary motions seeking court approval to continue supporting its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption and other relief measures customary in these circumstances.
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
September 01, 2021 10:03 ET (14:03 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.