Toms Shoes LLC is being taken over by its creditors from founder Blake Mycoskie and private equity firm Bain Capital as part of a debt exchange.
The creditors, led by Jefferies Financial Group, Nexus Capital Management LP and Brookfield Asset Management, will invest $35 million in Toms, according to the letter attained by Reuters.
“Combined with an enhanced capital structure, this funding will enable Toms to further invest in our promising growth areas and continue our commitment to giving, which have been initiated and supported by Bain Capital and Blake over the past five years,” Toms CEO Jim Alling wrote.
Credit ratings agencies had warned that Toms would be unable to repay a $300 million loan due in 2020 without renegotiating its debt.
Bain acquired a 50 percent stake in Toms, known for its two-for-one charity model, five years ago with Mycoskie retaining half. The Reuters report noted that it’s uncertain whether Mycoskie will continue to have a role with the company with no ownership stake.
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