Children's Place Secures $100M Credit Facility, CFO Departs

TL;DR

Kids' clothing giant Children's Place just got a $100M credit line and their CFO is out. Big changes brewing.

AI Summary

On February 29, 2024, The Children's Place, Inc. entered into a new credit agreement with its existing lenders, providing a $100 million revolving credit facility. This facility matures on March 3, 2028, and replaces the previous credit agreement dated February 28, 2023. The company also announced the departure of its Chief Financial Officer, Michael Scarpa, effective March 1, 2024, and appointed William J. Simon as interim CFO.

Why It Matters

The new credit facility provides financial flexibility for The Children's Place, while the CFO transition may signal strategic shifts or operational adjustments.

Risk Assessment

Risk Level: medium — The company is undergoing a CFO transition and has entered into a new credit agreement, which could indicate financial restructuring or strategic shifts.

Key Numbers

• $100M — Revolving Credit Facility (Provides financial flexibility and liquidity.)
• March 3, 2028 — Credit Facility Maturity Date (Indicates the term of the new financing.)

Key Players & Entities

• The Children's Place, Inc. (company) — Registrant
• $100 million (dollar_amount) — Revolving credit facility amount
• March 3, 2028 (date) — Maturity date of credit facility
• February 28, 2023 (date) — Date of previous credit agreement
• Michael Scarpa (person) — Departing Chief Financial Officer
• March 1, 2024 (date) — Effective date of CFO departure
• William J. Simon (person) — Appointed interim Chief Financial Officer

FAQ

Key Financial Figures

• $0.10 — nge on which registered Common Stock, $0.10 par value PLCE NASDAQ Global Select
• $78.6 million — tal SPC ("Mithaq"), providing for up to $78.6 million in term loans, consisting of (a) an ini
• $30.0 million — original aggregate principal amount of $30.0 million (the "Initial Term Loan") and (b) a del
• $48.6 million — yed draw term loan commitment amount of $48.6 million (the "Delayed Draw Term Loan;" and toge
• $121.0 million — (net of fees and expenses) of at least $121.0 million from either the term loan (the "Gordon
• $50.0 million — s, repay in full the Company's existing $50.0 million term loan under its Credit Agreement, a
• $90.0 million — rights offering of up to approximately $90.0 million by distributing transferrable subscript

Filing Documents

• eh240453115_8k.htm (8-K) — 65KB
• eh240453115_ex0301.htm (EX-3.1) — 5KB
• eh240453115_ex0401.htm (EX-4.1) — 160KB
• eh240453115_ex1001.htm (EX-10.1) — 117KB
• eh240453115_ex1002.htm (EX-10.2) — 58KB
• eh240453115_ex9901.htm (EX-99.1) — 21KB
• tcp_logo.jpg (GRAPHIC) — 6KB
• 0000950142-24-000607.txt ( ) — 698KB
• plce-20240229.xsd (EX-101.SCH) — 3KB
• plce-20240229_lab.xml (EX-101.LAB) — 33KB
• plce-20240229_pre.xml (EX-101.PRE) — 22KB
• eh240453115_8k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Mithaq Term Loans On February 29, 2024, The Children's Place, Inc. (the "Company") and certain of its subsidiaries entered into an interest-free unsecured promissory note, dated February 29, 2024 (the "Promissory Note") with Mithaq Capital SPC ("Mithaq"), providing for up to $78.6 million in term loans, consisting of (a) an initial term loan in an original aggregate principal amount of $30.0 million (the "Initial Term Loan") and (b) a delayed draw term loan commitment amount of $48.6 million (the "Delayed Draw Term Loan;" and together with the Initial Term Loan, collectively, the "Mithaq Term Loans"). Also on February 29, 2024, the Company received the proceeds of the Initial Term Loan. The Mithaq Term Loans mature on February 15, 2027. The Mithaq Term Loans are interest-free, unsecured, and are guaranteed by each of the Company's subsidiaries that guarantee the Company's existing revolving credit facility under its Amended and Restated Credit Agreement dated May 9, 2019, as amended (the "Credit Agreement"), with Wells Fargo, National Association ("Wells Fargo"), Truist Bank, Bank of America, N.A., HSBC Business Credit (USA) Inc., JPMorgan Chase Bank, N.A., and PNC Bank as lenders (collectively, the "Credit Agreement Lenders") and Wells Fargo, as Administrative Agent, Collateral Agent, Swing Line Lender and Term Agent (the "Credit Agreement Agent"). The Mithaq Term Loans do not provide for any closing or similar fees. In addition, the Mithaq Term Loans are to be made subject to a subordination agreement to be entered into between the Credit Agreement Lenders and Mithaq, pursuant to which the Mithaq Term Loans will be subordinated in payment priority to the obligations of the Company and its subsidiaries under the Credit Agreement. Subject to such subordination terms, the Mithaq Term Loans are prepayable at any time and from time to time without penalty and do not require any mandatory prepayments. The Prom

03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On February 29, 2024, the Board approved and adopted an amendment to the Company's Seventh Amended and Restated Bylaws (the "Bylaw Amendment"), which became effective the same day, to provide for the position of Chairman-Elect of the Board with the same authorities, rights, responsibilities and roles as the Chairman of the Board, and thus permit Mr. AlRajhi to be appointed as the Chairman-Elect in accordance with the Letter Agreement. The Bylaw Amendment also establishes that the State of Delaware shall be the sole and exclusive jurisdiction for any legal actions related to the Company. The foregoing description of the Bylaw Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaw Amendment, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure A copy of the Company's press release on February 29, 2024 relating to the above is attached hereto as Exhibit 99.1. The information contained in Item 7.01 and Exhibit 99.1 to this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any previous or future registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference. 6

01 Financial Statement and Exhibits

Item 9.01 Financial Statement and Exhibits. (d) Exhibits Exhibit Description Exhibit 3.1 Amendment to the Seventh Amended and Restated Bylaws of The Children's Place, Inc. Exhibit 4.1 Promissory Note, dated February 29, 2024, among the Company, certain subsidiaries of the Company, and Mithaq Capital SPC. Exhibit 10.1 Forbearance Agreement, dated February 29, 2024, among the Company, certain subsidiaries of the Company, the Credit Agreement Lenders and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, L/C Issuer, Swing Line Lender and Term Agent. Exhibit 10.2 Letter Agreement, dated February 29, 2024, between the Company and Mithaq Capital SPC. Exhibit 99.1 Press Release, dated February 29, 2024, issued by the Company (Exhibit 99.1 is furnished as part of this Current Report on Form 8-K). Exhibit 104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. 7

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Mithaq Term Loans, the Gordon Brothers Term Loan, the Forbearance Agreement, the Letter Agreement and the registered rights offering. Forward-looking statements typically are identified by use of terms such as "may," "will," "should," "plan," "project," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the "Risk Factors" section of its annual report on Form 10-K for the fiscal year ended January 28, 2023. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company's business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risks related to the COVID-19 pandemic, including the impact of the COVID-19 pandemic on our business or the economy in general, the risk that the Company's strategic initiatives to increase sales and margin are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company's global supply chain, including resulting from COVID-19 or other disease outbreaks, foreign sources of supply i

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View this 8-K filing on SEC EDGAR