The LYCRA Company to Eliminate More than $1.2 Billion of Debt through Prepackaged Restructuring Process, Positioning Business for Long-Term Financial Stability and Growth

(BUSINESS WIRE)--The LYCRA Company, LLC (“LYCRA” or “the Company”), a global leader in developing fiber and technology solutions for the apparel and personal care industries, announced today that it has entered into a restructuring support agreement (“RSA”) with the overwhelming majority of its creditors to eliminate approximately $1.2 billion of long-term debt and establish a sustainable capital structure that will recapitalize the Company and position it for long-term financial stability and growth.

The RSA has overwhelming support from holders of the Company’s senior secured term loan, 16.000% Senior Secured Notes, and 7.500% Senior Secured Notes, who have agreed to vote in favor of a prepackaged plan of reorganization (the “Prepackaged Plan”). To implement the Prepackaged Plan, the Company and certain of its affiliates, have filed a voluntary prepackaged Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of Texas.

The Prepackaged Plan reflects a consensual agreement reached over the course of several months of productive discussions with the Company’s key financial creditors. Given the near unanimous support of its stakeholders, the Company expects to complete its financial restructuring expeditiously and emerge from the Chapter 11 process within 45 days.

“The LYCRA Company’s products have long been a symbol of quality, delivering benefits like lasting comfort, fit, and performance across a wide variety of apparel and personal care applications,” said Gary Smith, Chief Executive Officer of The LYCRA Company. “Today marks a significant milestone for The LYCRA Company as we are taking decisive action to meaningfully reduce our debt and strengthen our financial foundation. By taking this step, we will continue serving our customers, supporting our partners, and providing the high-quality products on which they rely. I want to thank our team members for their ongoing dedication and our loyal customers and partners for their continued support throughout the process.”

The Company is seeking customary "first day" relief that will enable it to operate in the ordinary course of business throughout the restructuring process. As part of these first day motions, the Company will seek approval to continue to pay all valid amounts owed to vendors and suppliers in full in the ordinary course of business. To support these ordinary course operations, the Company has obtained commitments for $75 million in debtor-in-possession financing (“DIP Financing”) and more than $75 million in exit financing, which is poised to refinance the DIP Financing, providing the Company with capital upon completion of the Chapter 11 process.

Importantly, certain entities within The LYCRA Company are not included in the Chapter 11 filing. A list of those entities included in the filing can be found at https://restructuring.ra.kroll.com/lycra.

Additional Information

Bankruptcy Court filings and other information regarding the case can be found at https://restructuring.ra.kroll.com/lycra, or by contacting Kroll Inc., the Company’s noticing and claims agent, at (888) 498-1399 (toll-free) and (347) 338-6514 (international). Please note these resources are for information about the restructuring process only; all other customer service and support infrastructure and contact information for the Company remain active and operational.

The LYCRA Company is advised in this matter by Linklaters LLP and Haynes Boone, LLP as legal counsel, Houlihan Lokey as investment banker, and FTI Consulting as financial and communications advisor.

About The LYCRA Company

The LYCRA Company innovates and produces fiber and technology solutions for the apparel and personal care industries and owns the leading consumer brands: LYCRA^®, LYCRA HyFit^®, LYCRA^® T400^®, COOLMAX^®, THERMOLITE^®, ELASPAN^®, SUPPLEX^® and TACTEL^®. Headquartered in Wilmington, Delaware, U.S., The LYCRA Company is recognized worldwide for its sustainable products, technical expertise, and marketing support. The LYCRA Company focuses on adding value to its customers’ products by developing unique innovations designed to meet the consumer’s need for comfort and lasting performance. Learn more at thelycracompany.com.

LYCRA^® is a trademark of The LYCRA Company.

Forward-Looking Statements

This press release contains statements that are not historical information and are "forward-looking statements." Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. Statements can generally be identified as forward looking because they include words such as "believes," "anticipates," "expects," "intends," "plans," "will," "estimates," "potential," "target," "predict," "project," "seek," and variations thereof or "could," "should" or words of similar meaning. Statements that describe the Company's future plans, objectives or goals are also forward-looking statements, which reflect the current views of the Company with respect to future events and are subject to assumptions, risks and uncertainties that could cause actual results to differ materially. Although the Company believes that these forward-looking statements are based upon reasonable assumptions regarding, among other things, the economy, its knowledge of its business, and key performance indicators that impact the Company, these forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in or implied by the forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements.

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