Groupe Les Ailes de la Mode Inc.
TSX : MOD

November 04, 2005 11:10 ET

Groupe Les Ailes de La Mode Inc. -Not to Be Mistaken With The Department Stores 'Les Ailes de La Mode'- to Propose Restructuring of its Debentures

BOUCHERVILLE, QUEBEC--(CCNMatthews - Nov. 4, 2005) - Groupe Les Ailes de la Mode inc. (TSX:MOD) ("the Company"), not to be mistaken with Les Ailes de la Mode Incorporees, the department stores sold in August 2005, announced today that it intends to propose to the holders of its outstanding 12% unsecured debentures due 2008 to exchange their debentures for common shares of the Company. There is currently $15.6 million in principal amount of 12% debentures outstanding. The Company also intends to change its name to Groupe Bikini Village inc.

"In the past few months we have taken a number of steps to improve our financial position. In addition to selling our Les Ailes department stores, we have rationalized our activities and implemented cost containment measures while achieving significant growth in sales and profitability, recording a profit of $1.9 million from our remaining swimwear operations in our latest quarter," said Leslie E. Glazerman, Interim CEO and Interim CFO of Groupe Les Ailes de la Mode. "We are at a stage where we can capitalize on the strong momentum achieved in Bikini Village and Ocean Bikini Village. However, the monthly interest payment on our debentures is resulting in a liquidity shortfall and our current capital structure limits our strategic options, preventing us from opportunistically growing our business."

In order to achieve this, the Company will file an application today to obtain a court order from the Superior Court of the Province of Quebec under the Companies' Creditors Arrangement Act extending only to one class of creditors: the debenture holders. The Company will be asking debentures holders to exchange their debentures for common shares of the Company. The proposed exchange ratio will be the lower of the volume weighted average five-day share price prior to the announcement of the Court filing being today, or such five day average prior to the judgment homologating the arrangement accepted by the debenture holders. A significant number of debenture holders have already expressed their willingness to participate in the exchange, provided all of the debentures outstanding are exchanged for shares. The Company will also ask the Court to inter-alia prevent landlords from re-opening any leases as a result of the Court application.

Today's announcement does not affect the Les Ailes department stores which were sold by the Company in August 2005 and are now completely unrelated and independent of the Company. As a result of the sale agreement, the Company agreed to change its corporate name within a specific timeframe and is also asking the Court for an order to change its corporate name to Groupe Bikini Village inc. effective immediately.

The Company intends to continue conducting its operations in its usual fashion, providing normal service to its customers with all of its 57 Bikini Village and Bikini Ocean Village stores. The Company intends to pay its suppliers for all goods and services in the ordinary course of business, and all employees will continue to be paid according to their normal schedules.

"I want to make it absolutely clear that the Court order that we are seeking only involves debenture holders and in no way affects any other creditors or suppliers. All accounts payables are kept current and all operations are running normally," added Leslie E. Glazerman.

ABOUT THE COMPANY

The Company's swimwear division operates 57 swimwear boutiques in Quebec and Ontario under the Bikini Village and Ocean Bikini Village banners. It employs 400 people.

Forward-looking statements

This news release contains certain forward-looking statements concerning our future operations, economic performances, financial conditions and financing plans. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us and our subsidiaries or their businesses or operations.

We undertake no obligation and do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.

Contact Information

  • INFORMATION:
    Mark Boutet
    (514) 843-2385