Children's Place secures $78.6 million loan from Mithaq Capital

Key Summary: Mithaq Capital sought governance change and financing discussion. On Feb 29, 2024, $78.6M interest-free loan agreed, 4 new board members nominated, led by Turki Saleh A. AlRajhi as Chairman-Elect.

Market Cap: $363 million | The Children's Place Inc. is an American specialty retailer of children's apparel and accessories headquartered in Secaucus, New Jersey.

On February 14, 2024, Mithaq Capital SPC/ Snowball Compounding Ltd, with a 54% stake in the company has nominated eleven new candidates for the board of directors. They seek a meeting with the current board to discuss governance transition and financing for liquidity needs. Source

Update

On February 29, 2024, the company entered into a financing agreement with Mithaq Capital to receive $78.6 million in interest-free, unsecured term loans. This move aims to bolster the company's liquidity, with the first tranche of $30 million already provided on February 29, 2024. An additional $48.6 million is expected by March 29, 2024, subject to certain conditions. Concurrent with the funding, Mithaq nominated four new members to the Board, with Turki Saleh A. AlRajhi appointed as Chairman-Elect during a transition period. These appointments follow the resignation of four current directors, paving the way for a majority Mithaq-appointed Board once the second loan tranche is funded.

Past

In April 2015, Macellum and Barington Companies Equity Partners (together 2.1%) formed "Shareholders for Change at The Children’s Place" and sent a letter to shareholders, aiming to elect two board candidates and explore sale opportunities. In May 2015, the company reached an agreement with Macellum and Barington, resulting in one candidate from their group joining the board.