Unifi Inc., Greensboro, N.C., reports it sold its 34-percent interest in Parkdale America LLC (PAL) to majority partner Parkdale Inc. for $60 million in cash. The proceeds from the sale will be used to lower Net Debt and reduce leverage during the fourth quarter of fiscal 2020, according to Unifi. The company recorded a $45.2 million impairment charge in the third quarter of fiscal 2020 in connection with the sale.
“Parkdale has been the driver of the business and operational decisions of PAL since its inception, and this transaction is a natural evolution of our joint venture relationship,” said Tom Caudle, president and COO, Unifi. “We thank Parkdale for being such a great business partner and look forward to continued business activities in the future, even with Parkdale becoming the single owner of PAL. For Unifi, this transaction will allow us to focus our efforts on expanding our global leadership in recycled and synthetic fibers while strengthening our balance sheet and improving our leverage profile.”
Unifi notes that the company has suspended its fiscal 2020 outlook due to the uncertainty of the duration and severity of the COVID-19 pandemic.
“The first ten weeks of our fiscal third quarter were strong and consistent with our expectations as our trade actions and overall strategy were generating significant momentum,” Caudle said. “However, the impacts of the pandemic on global demand began materializing at the end of the March 2020 quarter, which have placed pressure on many of our customers and the pipeline.”