Bangalore: Textile and retail firm S Kumars Nationwide Ltd’s US unit HMX Acquisition Corp. has filed a voluntary application for capital restructuring under Chapter 11 of the US Bankruptcy Code.

HMX has undertaken steps involving the process of reorganizing and restructuring the company’s operations to maximize stakeholder value. The process has, however, “entailed filing voluntary petition under Chapter 11 for undertaking the restructuring exercise of the operations and reorganize capital structure," S Kumars director Dara D. Avari said in a statement to the stock exchange.

Chapter 11 permits reorganization under the bankruptcy laws of the US. HMX, or Hartmarx Corp., which owns brands including Hart Schaffner Marx and Hickey Freeman, was acquired by S Kumars from US Bankruptcy court in 2009 to expand its presence in North America.

While a credit facility was extended to the company during the takeover, a refinance process was also initiated with Salus Capital agreeing to fund as much as $75 million subject to S Kumars infusing capital of $15 million of its own. With liquidity condition tight and HMX’s business uncertain, S Kumars refused to invest.

To resolve the company’s financial crisis, Salus Capital, in discussion with HMX management, has appointed investment banker William Blair to look for a financial partner.

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