Boston, MA 03/21/2014 (wallstreetpr) – The Wet Seal, Inc. (NASDAQ:WTSL) a leading specialty retailer for young women has announced it is planning to raise $27 million through private placement of its convertible notes, as well as the purchase of its Class A common stock. Proceeds from the placement will be used to grow e-commerce and plus size businesses. Some of the funds will also be used to transform the company’s real estate portfolio.
Terms of the private placement
The offer will be opened till March 26, 2014 subject to customary and closing conditions from regulators. Wet Seal’s convertible notes will come with an interest rate of 6%, subject to adjustments and expected to mature in March 2017. Holders of the option will have a choice of converting the convertible notes, into the company’s Class A common stock at a price of $1.84 per share.
The monthly interest payment is scheduled to begin on the sixth month of issuance of the convertible notes. The Wet Seal, Inc. (NASDAQ:WTSL) will also plans to issue warrants to purchase 8.8 million class A common stock. The warrants subject to potential future anti-dilution adjustments will be exercisable at $2.12 per share
The wet Seal challenges in the market
The Wet Seal, Inc. (NASDAQ:WTSL) in a separate release also announced that its teen’s retail divisions is experiencing a chain of challenges that should have a massive effect on the current quarter earnings. Wet Seal expects to generate a net loss to be between $13.57 million and $16.11 million for the current quarters as a result of the challenges.
The retail store expects its same store sales to drop by 10% to 20% for the current quarter with Wall Street analysts projecting the net sales of around $130.55 million. Wet Seal’s net loss in the recent past has widened from a low of $4.8 million to a high of $19.5 million, analysts currently project a net loss of around $20 million
The Wet Seal, Inc. (NASDAQ:WTSL) has also announced its plans to open 10 new stores in outlet centers while also shutting down 17, whose leases will have expired.
The Wet Seal, Inc. (NASDAQ:WTSL): Planning to Raise $27M through Private Placement
