Children’s apparel and accessories retailer Children’s Place Inc (NASDAQ:PLCE) shares are shooting higher after the company disclosed a new financing agreement.

Children’s Place has entered into a financing agreement with its majority shareholder, Mithaq Capital SPC, for an unsecured and subordinated $90 million term loan. The loan is expected to be funded no later than April 19, 2024. 

The term loan is expected to strengthen the company’s liquidity position on better terms than the previously announced term loan the company entered into with 1903P Loan Agent, LLC.

The company intends to use the net proceeds of the New Mithaq Term Loan to repay its existing $50 million term loan and for other general corporate purposes.

The loan will mature on April 16, 2027, and will accrue interest at the Secured Overnight Financing Rate (SOFR) plus 4.00% per annum, with accruing interest payments to be deferred until April 30, 2025.

“We are pleased to have the continued support of our majority shareholder, and to have secured additional funding to address our liquidity needs on significantly more favorable terms in the aggregate than those contemplated by the Proposed Term Loan,” said COO and CFO Sheamus Toal.

Since February 29, 2024, the company has received $168.6 million in funding from Mithaq.

Price Action: PLCE shares are trading higher by 24.6% at $8.86 on the last check Wednesday.