Hingham, Mass. Talbots has beefed up its liquidity with a $150 million revolving loan agreement with its largest shareholder, Aeon Co., according to the Boston Business Journal.
The agreement was finalized April 10 and enables Talbots to borrow in “integral multiples of $10 million.” Talbots will pay a $1.5 million facility fee once it taps the new loan facility.
The company plans to use the revolving loan to support general administrative and working capital needs.
The revolving loan comes due April 17, unless the company raises additional capital and Aeon agrees to have the debt paid down prematurely.
Talbots has pledged its credit card and charge card receivables, as well as its headquarters and a facility in Lakeville, Mass., as collateral.
Talbots has $165 million in other working capital loans, $80 million in revolving debt and $20 million in a term loan outstanding.
For the fiscal year ended Jan. 31, Talbots booked $1.5 billion in sales and a net loss of $560.7 million. The company collected $1.71 billion in sales and recognized a $188.8 million net loss in the previous fiscal year.
Talbots' sales in the fourth quarter were off more than 25%, year-over-year, while its net loss for the period more than doubled to $366 million.