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financing letter

Village Green signs
financing letter

The Village Green Bookstore Inc. has gone to the underwriter of its 1995 public offering to finance $1.2 million in overdue subordinated debentures, the company said today.
“Given our prior substantial efforts at securing financing, this alternative was the best possible way to serve the interests of our debenture holders and shareholders,” said Raymond Sparks, chairman and CEO of Village Green, in a prepared statement.
The bookstore has signed a letter of intent with VGBS Acquisition Corp., a subsidiary of H.J. Meyers & Co. Inc. H.J. Meyers is one of the company’s market makers and underwrote the 1995 offering.
Under the terms of the letter, VGBS would purchase 2.4 million shares of Village Green common stock for $300,000 in cash, plus joint and several assumption of $900,000 of the principal amount due under the company’s senior subordinated debentures, the company said.
VGBS has advised the company that as soon as feasible, the $300,000 cash will be placed in an escrow account for delivery to the debenture holders upon their approval of the repayment plan.
The plan calls for additional payments to be made in three quarterly installments of $300,000 beginning in November and ending in May 1997, the company said.
VGBS or its designee will enter into a voting agreement with management, and the company will enter into a one-year financial-consulting agreement with Bright Capital LLC, a merchant-banking firm. Bright Capital will be paid $100,000.
“If the debenture holders agree to this repayment plan, the company may again attempt to focus on developing the Kideology retail stores,” Sparks said. “For the last 10 months, the company has been focusing much of its efforts on paying off its debt while being challenged in the bookstore retail environment by the major expansion of the superstores.”
The chain is down to five stores, having closed five this year.
The debentures came due April 28, when Village Green had only $12,338 cash and cash equivalents on hand, according to SEC documents.
The company made interest payments on the debentures on May 28. Village Green had worked out a $2 million line of credit, but was turned down during final stages of review in June.
Village Green blamed competitive conditions for the money problems. In recent years, national book retailers such as Barnes & Noble Booksellers Inc. and Borders Books and Music Inc. have opened superstores in Village Green’s existing markets in New York and Pennsylvania.
Sparks had said the company would have a hard time competing with the superstores on a long-term basis, which is why the Village Green planned to continue developing Kideology stores. The Kideology stores sell education-related toys and activities.

Village Green signs
financing letter

The Village Green Bookstore Inc. has gone to the underwriter of its 1995 public offering to finance $1.2 million in overdue subordinated debentures, the company said today.
“Given our prior substantial efforts at securing financing, this alternative was the best possible way to serve the interests of our debenture holders and shareholders,” said Raymond Sparks, chairman and CEO of Village Green, in a prepared statement.

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