S Kumars US arm files voluntary petition for bankruptcy

Our Bureau Mumbai | Updated on March 12, 2018 Published on October 29, 2012

S Kumars Nationwide’s US subsidiary HMX Acquisition Corp has filed a voluntary petition for bankruptcy (under Chapter 11) on October 19.

HMX is into making tailored suits in the US.

S Kumars was awarded the company in June 2009, when HMX then filed for Chapter 11.

An HMX statement said that its existing lender had ratified and re-affirmed up to a $65-million credit facility.

The debtor-in-possession (DIP) facility provides immediate liquidity, while the company pursues alternatives to pay vendors for goods and services received after the filing. In addition, HMX is seeking customary authority from the court to continue operating its business. HMX has also sought approval of the stalking horse bid with Authentic Brands Group.

The Authentic Group will provide a long-term licence of HMX's brands to a new entity which will continue to retain the HMX’s employees, operate the existing brands and manufacturing facilities.

Companies filing for Chapter 11 bankruptcy have to come out with a plan to re-organise their business and debt.

The plan is confirmed only if the judge approves it after all creditors agree.

On confirmation, the plan becomes binding. Asked whether the company was in the process of informing the Indian bourses on the development, an S Kumar’s official said they could inform the exchanges on the outcome (of the voluntary petition under Chapter 11) only after the case is heard on November 8.

“We can re-bid alone or in partnership,” he said.

HMX received a $95-million credit line in August 2009 which was reduced to about two-thirds by July this year.

The company providing the DIP, Salus Capital, has agreed to fund only if SKNL infused $15 million.

Having decided against further infusion of capital, the option of voluntary petition under Chapter 11 was exercised, he said.

Suits tailored by HMX are worn by the who’s who in US, including President Barack Obama and his challenger Mitt Romney.


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Published on October 29, 2012
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