BIRMINGHAM, Ala. (HedgeWorld.com)–Saks Inc. announced that it has received a notice of default from a hedge fund, which a spokeswoman declined to name, and that this notice, issued Tuesday, June 14, initiates a 60-day cure period.
The default notice was triggered by Saks’ failure to file with the Securities and Exchange Commission the 2004 10-K, or its first quarter 10-Q. Timely filings are required in the indenture for its convertible notes.
Saks has said that it expects to file the 10-K by September 1, 2005, and the 10-Q at approximately the same time. But the cure period will end August 13.
If the sixty days expire without cure of the default, the maturity of outstanding 2% convertible senior notes due March 15, 2024 (totaling US$230 million), will be accelerated. The company said that the hedge fund that sent the default notice holds more than 25% of these convertible notes. It also said that the acceleration of those notes could result in the acceleration of maturity of some or all of the company’s US$990 million of senior notes.