TOWER SELLS JAPAN UNIT, BEATS DEBT PAYBACK DEADLINE

The Sacramento, CA-based retail giant is selling its 51-store Japanese unit to Nikko Cordial Corp. for a reported $122 million. This means that proprietors Russ and Michael Solomon will indeed be able to pay down their current revolving credit facility before the April 23 deadline. The buyout was finalized yesterday (4/11).

Tower has been reorganizing both their domestic and international operations for the last year. They were given a crucial extension by their lenders, led by Chase Manhattan Bank, in order to operate at full capacity through the 2001 holiday season. But April 23 loomed large as a deadline for paying down that debt, or the company would reportedly face dire consequences.

This new infusion of cash will enable Tower to put a large dent in the $159 million they’ve already borrowed from their $195 million credit line.

Insiders say an agreement is imminent for a new credit facility, ready to be put in place pending the sale of the Japanese unit. Nikko says it plans to go public with their 51 stores in the near future.

So, despite the rumor-mongering, Tower was never in real danger of filing anything but their tax returns. They now have a manageable debt load. The domestic reorganization continues, and you can go back to your regularly scheduled programming.