New York jeweller Tiffany amends debt-financing for leeway amid slump in sales

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New York jeweller Tiffany amends debt-financing for leeway amid slump in sales

Tiffany & Co., the New York city-based American luxury jeweller, which would soon be bought by the French luxury fashion industry conglomerate LVMH at a $16 billion buyout deal, had issued a statement on Tuesday saying that the American jeweller had altered some of its debt financing agreements in a bid to achieve a higher financial flexibility amid the pandemic-led slump on its businesses.

In point of fact, latest statement from the Tiffany & Co. came forth shortly after the company had reported a 44 per cent nosedive in sales over the first quarter of the year compared to the same time a year earlier, stoking possibilities of an amendment in the Tiffany & Co.

buyout deal given the scale of weakening financial condition of the American luxury jeweller. Besides, the alternations in the debt financing deal had also raised the maximum leverage ratio of the Tiffany & Co.

to 4.5 from a prior 3.5, while some analysts had already raised a red flag over Tiffany’s leveraged debts adding that the US Jeweller had breached in debt accords over second quarter of the year.

Tiffany & Co. shares up 2 per cent after debt amendment deal

On top of that, although the NYSE-listed shares’ prices of Tiffany & Co.

had surged as much as 2 per cent on Tuesday’s market closure to $124.51 per share after rising as much as 2.5 per cent in the pre-market trading followed by the reveal of the debt-financing deal, sources familiar with the issue said on condition of anonymity on later part of the day that the LVMH Chief Executive Bernard Arnault had been exploring options to pressurize the American jeweller to lower the agreed price of $135 per share.

Concomitantly, followed by the reveal of a possible decline in Tiffany & Co. buyout bid, Tiffany & Co. shrugged off 2.38 per cent in Wednesday’s pre-market trading, while during preparation of the report, at early morning US trading hours, shares’ prices of Tiffany & Co. were trading 2.62 per cent lower to $121.27 a share.