NEW YORK, June 15, 2016 /PRNewswire/ -- Garnero Group
Acquisition Company (NASDAQ: GGAC) ("GGAC"), a public investment
vehicle formed for the purpose of effecting a merger, acquisition
or similar business combination, and Q1 Comercial de Roupas S.A.
("Grupo Colombo" or "GC"), a leading
apparel retailer in Brazil,
announced today that they have entered into an amendment to the
definitive investment agreement ("Amendment") related to their
previously announced proposed merger.
The Amendment was prompted in part by Grupo Colombo's entry into its previously
disclosed financial restructuring. As announced on June 10, 2016, Grupo
Colombo's restructuring plan provides capital structure
equalization and a balanced cash flow for operations going forward.
The restructuring plan has been approved by approximately 64% of
Grupo Colombo's unsecured creditors
and, upon confirmation by the Brazilian courts, will be applicable
to all of Grupo Colombo's unsecured
creditors. In place of their current debts, unsecured creditors
will receive either a discounted debt with extended payment terms,
equity, debentures or convertible debentures. The debentures will
earn a percentage of Grupo Colombo's
profits (or 0.5% simple interest per annum, if greater). Under the
terms of the restructuring plan, the transactions contemplated by
the investment agreement must be approved by 60% of the debenture
holders, with silence constituting consent. Upon confirmation of
the debt reorganization, Warley
Pimentel will assume the role as the new CEO of Grupo Colombo; the current CEO, Alvaro Jabur Jr., will take an advisory role to
the senior management.
Key changes to the investment agreement include the
following:
- The shareholders of GC have now committed to purchase, directly
or through other entities acting at their direction, $10 million of GGAC shares in the public
market.
- The date by which the transactions must be completed pursuant
to the investment agreement has been extended to June 25, 2016 (or July 22,
2016 if GGAC obtains an extension of the date by which it
must complete an initial business combination).
- Grupo Colombo has committed to
obtain, or to use its commercially reasonable best efforts to
obtain, certain necessary consents and approvals, including the
court approval of the restructuring plan, certain necessary
amendments to the restructuring plan and the consent of the
debenture holders.
- Grupo Colombo will pay the fees
and expenses incurred by GGAC if GGAC is required to obtain an
extension of the date by which it must complete an initial business
combination.
- Other changes necessary to reflect the terms of the
restructuring plans.
The description of the transaction contained herein is only a
summary and is qualified in its entirety by reference to the
definitive agreement relating to the transaction, a copy of which
will be filed by GGAC with the SEC as an exhibit to a Current
Report on Form 8-K. Interested parties should visit the SEC website
at www.sec.gov.
About Grupo Colombo
Founded in 1917, Grupo Colombo is
one of Brazil's leading retailers
with a focus on menswear, with approximately 400 stores throughout
the country. GC has strong brand awareness for its clothing and is
known for its high quality products at competitive prices. Basic
pieces that don't go out of fashion which consumers wear day-to-day
for business or leisure are found throughout the year in its
stores. Beyond the basics, GC also has a premium line that brings
fresh ideas every season. For more information, please
visit www.grupocolombo.com.br/investors.
About Garnero Group Acquisition Company
GGAC was incorporated in the Cayman
Islands on February 11, 2014
as a blank check company whose objective is to acquire, through a
merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business
combination, one or more businesses or entities.
Forward Looking Statements
This press release includes certain forward-looking statements,
including statements regarding future financial performance, future
growth and future acquisitions. These statements are based on
Grupo Colombo's and GGAC's
managements' current expectations or beliefs and are subject to
risk, uncertainty and changes in circumstances. Actual results may
vary materially from those expressed or implied by the statements
herein due to changes in economic, business, competitive and/or
regulatory factors, and other risks and uncertainties affecting the
operation of Grupo Colombo's
business. These risks, uncertainties and contingencies include:
business conditions; changing interpretations of GAAP; fluctuations
in customer demand; management of rapid growth; intensity of
competition from other providers of products and services; general
economic conditions; geopolitical events and regulatory changes;
the possibility that the transactions do not close, including due
to the failure to receive required shareholder approvals or the
failure of other closing conditions, such as receipt of necessary
governmental or regulatory approvals; and other factors set forth
in GGAC's filings with the Securities and Exchange Commission. The
information set forth herein should be read in light of such risks.
Neither GGAC nor Grupo Colombo is
under any obligation to, and expressly disclaims any obligation to,
update or alter its forward-looking statements, whether as a result
of new information, future events, changes in assumptions or
otherwise.
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SOURCE Garnero Group Acquisition Company