Children's Place Inc. (NASDAQ:PLCE) drew $15 million from a credit line provided by Mithaq Capital SPC, the company said, a transaction that preceded a 2.8% decline in the retailer's shares during after-hours trading on Tuesday.
The advance, dated July 1, 2026, was made via an unsecured and subordinated promissory note and represents the first advance under a $40 million commitment from Mithaq. Following the drawdown, the company's remaining availability under the facility is $25 million.
The term loan carries a maturity date of April 16, 2031. Interest accrues at the Secured Overnight Financing Rate for a one-month period plus 9.00% per annum. Interest payments are due monthly in cash; however, the company has the option to defer those payments by providing written notice to Mithaq.
The new loan is guaranteed by subsidiaries of Children's Place that also serve as guarantors on the retailer's existing credit arrangements, including a $350 million revolving credit facility with Wells Fargo and a $100 million term loan with SLR Credit Solutions. In the lender hierarchy, the Mithaq loan is subordinated to those senior obligations.
Company guidance states the proceeds from the Mithaq advance will be used to prepay amounts under the revolving credit facility, reduce vendor accounts payable balances, and for general corporate purposes.
Mithaq is identified as a controlling shareholder of Children's Place. Turki Saleh A. AlRajhi, who is the Executive Chairman of Children's Place, also serves as Chairman and Chief Executive Officer of Mithaq Holding Company. The company said the transaction was approved as a related party transaction in accordance with its policies.
In a separate governance move, Children's Place named Muhammad Asif Seemab as President and Interim Chief Executive Officer effective July 6, 2026. Seemab, who is Managing Director of Mithaq Holding Company, succeeds Muhammad Umair, who resigned from the CEO role but remains with the company and on its board. The company indicated Seemab's annual cash compensation will remain at $497,500.
Share-price markers published alongside the corporate update showed the stock at a previous close of $3.26, up $0.06 or 1.88% during the regular session, and trading at $3.17 in after-hours trading, down $0.09 or 2.76%.
Market and sector context
The financing alters the company's near-term liquidity profile by reducing unused capacity under the Mithaq commitment to $25 million and layering in a subordinated, higher-rate obligation that sits behind existing secured facilities. The guarantor structure links the new loan to the same subsidiaries backing the larger Wells Fargo revolving facility and the SLR term loan.
Transaction approvals and conflicts
Because Mithaq is a controlling shareholder and its management overlaps with Children's Place leadership, the company verified the advance as a related party transaction under its governance rules.
Key metrics provided in the filing
- Amount drawn: $15 million
- Commitment size with Mithaq: $40 million (first advance)
- Remaining availability: $25 million
- Loan maturity: April 16, 2031
- Interest rate: SOFR (one-month) plus 9.00% per annum
- Related existing facilities guaranteed by same subsidiaries: $350 million revolving facility with Wells Fargo; $100 million term loan with SLR Credit Solutions
- Interim CEO cash compensation: $497,500 per year