A United States bankruptcy court has cleared the way for the sale of troubled luxury gadget retailer Brookstone Inc. to Chinese buyers
The decision means the US$174 million acquisition of the American chain by Chinese conglomerate Sanpower Group and Hong Kong-based private equity firm Sailing Capital can proceed. The money will be used to pay Brookstone Inc. creditors, Bloomberg reported Tuesday.
The Chinese group outbid a unit of novelty retailer Spencer Spirit Holdings Inc. at an auction this month, according to court documents. Spencer will get about US$4.2 million in breakup fees and expense reimbursement.
The new owners will continue to operate almost all the 242 stores, closing two at most, the report said.
They plan to revitalize Brookstone’s US operations and expand overseas.
After the deal, Brookstone will have about US$55.9 million in liabilities, US$240 million lower than the current balance sheet, a company lawyer said.
Earnings before interest, taxes, depreciation and amortization are projected at US$30.5 million in 2015.
The Chinese group will pay US$135.7 million in cash and US$10 million in notes and assume about US$28 million of Brookstone’s liabilities, the report said.
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