Benzinga | Jan 21, 2021 08:44AM EST

UPDATE: Naked Brands Entered Non-Binding Letter Of Intent With Group Composed Of Entities Controlled By Chair, CEO, Bendon CEO

In connection with the restructuring, on January 21, 2021, the Company entered into a non-binding letter of intent (the "Non-Binding LOI") with a group composed of entities controlled by Justin Davis-Rice, the Company's Executive Chairman and Chief Executive Officer, and Anna Johnson, Bendon's Chief Executive Officer (the "Purchaser"). Under the proposed terms set forth in the Non-Binding LOI:



? The Purchaser would acquire all of the outstanding shares of Bendon. The Purchaser would assume the existing liabilities of Bendon (other than inter-company liabilities, which will be forgiven), after repayment in full ? by the Company of Bendon?s senior secured credit facility with the Bank of New Zealand (?BNZ?). The liabilities of Bendon, excluding liabilities of approximately NZ$15 million to BNZ, are estimated to be approximately NZ$33 million. If the Bendon inventory is more than a target amount, the Purchaser would pay a cash adjustment equal to the difference to the Company and, if the ? Bendon inventory is less than such target amount, the Company would pay a cash adjustment equal to the difference to the Purchaser. The obligation of the Company to pay any such adjustment would be conditioned on the Company?s ability to meet certain capital raising targets. The Company would would have the right to receive a specified percentage of Bendon?s net profits during the three year period commencing on the first ? day of the second half of fiscal year 2022 and a specified percentage of the net proceeds from any subsequent sale of Bendon prior to the third anniversary of the closing. The Company would provide a five-year subordinated secured loan to the ? Purchaser. In addition, Bendon or the Purchaser would obtain a senior secured credit facility. FOH Online would enter into a services agreement with Bendon, pursuant to which Bendon will provide various business services to FOH Online, ? including accounting, product design, logistics and shipping support, distribution support, website maintenance and management, customer service, marketing, advertising and information technology support.



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The closing of the transaction would be subject to certain customary conditions precedent, including, without limitation, the Company meeting certain capital raising targets, the BNZ senior secured credit facility ? having been repaid, the Company receiving an independent expert?s report on the fairness and reasonableness of the transaction and the Company?s shareholders (other than shareholders associated with the Purchaser) approving the transaction.



The Company's press release announcing the restructuring is attached to this report as Exhibit 99.1 and is incorporated herein by reference.