Pacific Brands moves to reduce debt

Pacific Brands moves to reduce debt

Clothing group Pacific Brands has paid down $25 million of debt and rolled over a separate facility.

The move is the latest by the loss-making group to shore up its balance sheet amid ongoing turmoil in the retail sector to which it sells brands including Bonds and Berlei.

It cuts the company’s securitised debt facility from $175 million to $150 million.

Investors reacted to the news with the stock trading 1 per cent higher.

While today’s move does not change the company’s net debt, reported at $242 million as of December 31, because cash and debt are reduced by the same amount.

However, the company’s net debt for the financial year just ended is likely to come in at less than $242 million because it requires less working capital in the second half of the year and has sold off property.

In addition to reducing its securitised debt, Pacific Brands today extended the term of a $175 million facility syndicated between a group of banks.

The facility, originally arranged in February last year, has been extended from May 23 next year to July 31, 2015.

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