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HBI » Topics » As a result of our substantial indebtedness, we may not have sufficient funding for our operations and capital requirements.This excerpt taken from the HBI 10-K filed Sep 28, 2006. As a
result of our substantial indebtedness, we may not have
sufficient funding for our operations and capital
requirements.
We paid $2.4 billion of the proceeds of the borrowings we
incurred in connection with the spin off to Sara Lee, and as a
result, those proceeds are not available for our business needs,
such as funding working capital or the expansion of our
operations. In addition, the restrictions contained in our
credit facilities restrict our ability to obtain additional
capital in the future to:
We may need to incur additional debt or issue equity in order to
fund working capital and capital expenditures or to make
acquisitions and other investments. We cannot assure you that
debt or equity financing will be available to us on acceptable
terms or at all. If we are not able to obtain sufficient
financing, we may be unable to maintain or expand our business.
It may be more expensive for us to raise funds through the
issuance of additional debt than it was while we were part of
Sara Lee.
Table of Contents
If we raise funds through the issuance of debt or equity, any
debt securities or preferred stock issued will have rights,
preferences and privileges senior to those of holders of our
common stock in the event of a liquidation, and the terms of the
debt securities may impose restrictions on our operations. If we
raise funds through the issuance of equity, the issuance would
dilute the ownership interest of our stockholders.
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