UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 2000
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GALEY & LORD, INC.
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Exact name of registrant as specified in its charter
DELAWARE 56-1593207
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State or other jurisdiction of IRS Employer Identification No.
incorporation or organization
980 Avenue of the Americas, New York, New York 10018
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Address of principal executive offices Zip Code
212/465-3000
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Registrant's telephone number, including area code
Not Applicable
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Former name, former address and former fiscal year, if changed since last
report.
Item 5. Other Events.
Galey & Lord, Inc. (the "Company") solicited consents of the holders of record
on May 9, 2000 (the "Record Date") of its 9 1/8% Senior Subordinated Notes Due
2008 ($300 million principal amount outstanding) (the "Notes") to an amendment
to the indenture, dated as of February 24, 1998, among the Company, its domestic
subsidiaries party thereto, as guarantors, and SunTrust Bank (f/k/a SunTrust
Bank, Atlanta), as trustee, which governs the Notes (the "Indenture").
The proposed amendment to the Indenture (the "Amendment") will amend
the definition of "Permitted Investment" in the Indenture to allow the Company
and its Restricted Subsidiaries (as defined in the Indenture) to make additional
Investments (as defined in the Indenture) totaling $15 million at any time
outstanding in one or more joint ventures which conduct manufacturing operations
primarily in Mexico.
The current definition of "Permitted Investment" in the Indenture only
allows the Company and its Restricted Subsidiaries to make Investments in joint
ventures and other entities which are not Restricted Subsidiaries up to an
amount not exceeding $10 million outstanding at any time.
As previously disclosed, the Company has agreed in principle to the
basic terms of a joint venture (the "Joint Venture") in Mexico pursuant to which
the Company will receive an equity interest in a newly formed Mexican entity
which will simultaneously acquire an existing denim manufacturing business (the
"Existing Business") from a group which includes the Company's partner in the
Joint Venture. The Existing Business is a "state-of-the-art" denim fabric
factory built within the past three years. To date the Company has not entered
into a definitive agreement with respect to the Joint Venture and there can be
no assurance that the Company will enter into a definitive agreement and
consummate the Joint Venture.
The Amendment will permit the Company to make the initial investment in
the Joint Venture and will enable the Company to make further investments in the
Joint Venture in the future to fund capital expenditures and meet working
capital needs. The Amendment will provide the Company with the ability to make
such future investments as long as in the aggregate, all such investments,
together with the initial investment in the Joint Venture and all other
investments outstanding at any one time do not exceed $25 million in the
aggregate (provided that $15 million of such $25 million is invested only in
joint ventures which conduct manufacturing operations primarily in Mexico).
The effectiveness of the Amendment is conditioned upon (i) the Company
obtaining the consent of holders on the Record Date of not less than a majority
in aggregate principal amount of the outstanding Notes and (ii) the consummation
of the Joint Venture.
The consent solicitation expired on May 24, 2000 (the "Expiration
Date"). The Company has obtained consents of holders of approximately 97% of the
aggregate outstanding principal amount of the Notes. The effectiveness of the
Amendment remains conditioned upon the consummation of the Joint Venture. In
addition, the Company has agreed, that if the Amendment becomes effective, the
Company will make a consent payment of $2.50 in cash for each $1,000 principal
amount of the Notes for which a consent has been furnished (and not revoked)
prior to the Expiration Date.
Forward-Looking Statements
This Form 8-K contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Those statements
include statements regarding the intent, belief or current expectations of the
Company and its management team. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements. Such risks and
uncertainties include, among other things, competitive and economic factors in
the textile, apparel and home furnishings markets, raw material and other costs,
weather-related delays, general economic conditions and other risks and
uncertainties that may be detailed herein or from time to time in the Company's
other reports filed with the Securities and Exchange Commission.
Exhibits
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1. Form of Supplemental Indenture
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Galey & Lord, Inc.
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(Registrant)
/s/ Michael R. Harmon
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Michael R. Harmon
Executive Vice-President,
Chief Financial Officer
(Principal Financial and
Accounting Officer),
Treasurer and Secretary
June 1, 2000
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Date