Aug 24, 2016
Canada's Performance Sports reportedly taps debt restructuring advisor
Aug 24, 2016
Performance Sports Group Ltd, the maker of Bauer Hockey gear and Easton Sports baseball bats, has turned to an investment bank for advice on how to cope with its debt pile, according to people familiar with the matter.
The move underscores the challenges North American sporting goods manufacturers face in their highly competitive market.
Performance Sports has sought the help of investment bank Centerview Partners Holdings LLC on its negotiations with its lenders, the people said on Tuesday, asking not to be identified, because the matter is not public.
Performance Sports and Centerview did not respond to requests for comment.
Performance Sports, which has offices in British Columbia and Exeter, New Hampshire, lost more than half of its market value last week after it said it may default on its loans due to a delay in filing its annual report. It now has a market capitalization of C$116.2 million ($90 million).
The delay in filing its annual report is the result of an internal investigation over its accounting, the company has said.
Performance Sports also said last week it was the subject of inquiries by U.S. and Canadian securities regulators, including an investigation by the U.S. Securities and Exchange Commission. It also faces a shareholder class action lawsuit.
Performance Sports has two loans, a term loan for $450 million, of which $330.5 million was drawn in February, and an asset-based revolving credit line of $200 million, which had $119.2 million drawn at the same time. The company went public just two years ago.
Bank of America Corp helped obtain a loan that Performance Sports received in 2014, according to Thomson Reuters data.
The company's woes reflect the tumult seen across its sector. U.S. sporting goods retailer Sports Authority Inc filed for bankruptcy earlier this year.
Performance Sports in June slashed its full-year earnings forecast, citing a downturn in baseball and softball markets.
Total Hockey, a hockey gear retailer that filed for Chapter 11 reorganization in July, also owes Performance Sports affiliates over $14 million, according to its bankruptcy petition.
Last month, Performance Sports said that it was consolidating baseball and softball operations and scaling back some of its offerings to improve its financial performance.
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