Tefron arranges $5.2 million placement of shares with three investors

Company also announces plans to acquire assets of Nouvelle Seamless

By Devika Patel

Knoxville, Tenn., Nov. 17 - Tefron Ltd. said three investor groups will be investing in the company.

The company will raise $5.2 million through investments from the Lieberman family, Shamir Insurance and a group of investors led by the Rimon Investment Master Fund.

Under the agreements, the Lieberman family is to invest $2.7 million to acquire 20.5% of Tefron's outstanding shares, increasing its holdings in the company to 30.2%. Shamir Insurance will invest $1.3 million for 9.9% of Tefron's shares, and the investors group led by Rimon Funds will invest $1.2 million in exchange for 9.1% of the company shares.

The company also said it plans to acquire the seamless assets of Nouvelle Seamless Inc. for 600,000 shares. In addition, Tefron is in advanced negotiations to modify its current financing agreement with its bank lenders, including to increase its credit and debt facilities with the banks by at least $5 million and to establish new financial covenants according to the company's business plan.

Tefron will issue a number of shares equal to 49% of its total outstanding shares following the sale and acquisition. The shares will cover the acquisition of the Nouvelle operation, as well as the $5.2 million placement.

"These agreements have far-reaching implications for Tefron which took upon itself a challenge to regain its leading position in seamless apparel and performance apparel," chief executive officer Amit Meridor said in a press release. "Implementation of our turnaround program has succeeded in building an efficient and competitive cost structure, which is a vital component in executing the company's strategic plan going forward.

"The contemplated significant investment by the Lieberman family, Shamir Insurance and Rimon Funds will help to further solidify Tefron's financial strength and security.

"The acquisition of the Nouvelle activity, with its strong product offering to the mass market and its customer portfolio, complements Tefron's activity in the market and will strengthen Tefron's sales and marketing network in the U.S. market," Meridor added.

The producer of seamless intimate apparel and engineered-for-performance active wear is based in Misgav, Israel.

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