SUBSEQUENT EVENTS |
3 Months Ended |
|---|---|
Mar. 30, 2019 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | SUBSEQUENT EVENTS
Credit Agreement
On May 17, 2019, the Company and its wholly-owned subsidiary Lee Wrangler International Sagl entered into a credit agreement (the “Credit Agreement”) with respect to $1.55 billion in senior secured credit facilities consisting of a senior secured five-year $750 million term loan A facility (the “Term Loan A Facility”), a senior secured seven-year $300 million term loan B facility (the “Term Loan B Facility”) and a five-year $500 million senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders and agents party thereto. The Credit Agreement is subject to certain affirmative and negative covenants customary for financings of this type.
On May 17, 2019, the Company incurred $1.05 billion of indebtedness under the Credit Facilities, the proceeds of which were used primarily to finance a cash transfer to a member of VF’s group in connection with the Separation. Following the Separation, we expect to utilize the borrowing capacity under
the Revolving Credit Facility from time to time to provide working capital and funds for general corporate purposes.
Tax Matter
On May 19, 2019, Switzerland voted to approve the Federal Act on Tax Reform and AHV Financing (“Swiss Tax Act”). The Company is currently evaluating the potential impact of the Swiss Tax Act on the Company's combined financial statements. The associated tax effects will be reflected in the Company's quarterly results in the period in which the Swiss Tax Act is enacted.
Distribution from VF
On May 22, 2019, the Separation was completed through VF's distribution (the "Distribution") of 100% of the shares of Kontoor Brands, Inc. to holders of VF common stock as of the close of business on the record date of May 10, 2019. As a result of the Distribution, VF stockholders of record received one share of the Company's common stock for every seven shares of VF common stock. Following the Distribution, Kontoor Brands, Inc. became an
independent, publicly-traded company with no retained ownership by VF.
Sale of Accounts Receivable
On April 1, 2019, the Company entered into an agreement with a financial institution to sell selected trade accounts receivable on a recurring, nonrecourse basis. Under this agreement, which replaces the existing agreement between VF and a financial institution, up to $377.5 million of the Company's trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time.
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