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    iMedia Brands (IMBI) Improve Liquidity & Debt Management

    By Wasim Omar

    Dec 23,2022

    11:40 PM UTC

    iMedia Brands Inc. (NASDAQ: IMBI) is an American, micro-cap interactive media company, which has been plagued by uncertainty throughout the year. The macroeconomic stresses of 2022 had wreaked financial difficulty on the company and thus putting a question mark on its sustainability. Moving forward, however, market bulls appear to have latched on to a glimmer of hope for IMBI stock.

    iMedia Brands Finds Financial Workaround

    The management of iMedia Brands, earlier yesterday had made an announcement to sell and lease back three of its buildings, which would add a hefty $48 million figure to the company’s balance sheet. The move is one that companies normally engage in, to meet their financing needs, and is standard practice across various industries. iMedia Brands has stated its plans of using the acquired funds to pay off the debt it holds, including a $28.5 million term loan to the Green Lake financiers. This debt write-down bodes well for the company’s future prospects, allowing it to avoid a Chapter 11 filing. It is evident that the move saw appreciation by the market, as IMBI stock took off today by 35%.

    IMBI Debt and Liquidity Management Outlook

    The sale and leaseback move does not come out of the blue for IMBI, considering that its management had stated as early as February towards working towards this goal. During the year, the company had already reduced its debt by $7 million, by tapping into its reserved earnings. Its positive business performance has contributed towards the successful execution of this strategy, with over $5 million coming in through positive working capital. Last year, this figure stood at $41 million, indicating that working capital management has improved year-on-year by an impressive $46 million.

    Conclusion

    IMBI stock faced widespread pessimism given the financial challenges it had faced. However, its management’s brilliant debt and liquidity management have been playing a major role in its progression to financial sustainability.

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