COLUMBUS, Ohio, April 21 /PRNewswire-FirstCall/ -- Retail Ventures, Inc. (NYSE: RVI) today announced the disposition of its Filene's Basement subsidiary to FB II Acquisition Corp., a newly formed entity owned by the Buxbaum Group. RVI will not realize any proceeds from this transaction. Filene's Basement has recently experienced significant liquidity problems. Future plans for the operation of the Filene's Basement business are uncertain and will be controlled by Filene's Basement and its new owner. Filene's Basement has retained Pachulski, Stang, Ziehl & Jones LLP as counsel and Mr. Alan Cohen as Chief Restructuring Officer.
RVI's guarantee of all of Filene's Basement's obligations under its secured credit agreement, which currently has a balance of $14.2 million, will continue notwithstanding today's disposition of Filene's Basement by RVI. As previously disclosed, RVI has an arrangement with the lenders under the secured credit agreement pursuant to which RVI has agreed to acquire a $7.5 million Last Out Participation in that secured credit agreement, which is included in the current loan balance amount referred to above. In connection with the disposition of the stock of Filene's Basement, RVI and the lenders under Filene's Basement's secured credit facility have entered into an agreement pursuant to which the lenders will, subject to certain terms and conditions, forbear from making demand on the RVI guarantee until the lenders, to the extent reasonably possible, have been able to be repaid by Filene's Basement. There can be no assurance that all of the terms and conditions to the forbearance agreement, some of which are not within the control of RVI, will be satisfied and, in addition, RVI does not currently have forbearance agreements with respect to certain other obligations of Filene's Basement which RVI has guaranteed.
Retail Ventures has begun reviewing its available options to the extent it may become necessary to manage and enhance its liquidity position. Although RVI's plan to enhance liquidity could include, among other things, the sale or collateralization of shares of common stock of DSW Inc. or a sale of equity by RVI, no assurance can be given that any such transaction can be completed on favorable terms or that such a transaction would satisfy all of RVI's liquidity requirements.
DSW is not a party to any guarantees on behalf of Filene's Basement's contractual obligations, and DSW operates under a separate secured credit agreement to which neither RVI nor Filene's Basement is a party. RVI is not aware of any liquidity difficulties at DSW.
Retail Ventures, Inc.
