By 1808Delaware
It was expected, perhaps, but Monday’s filing under Chapter 11 in the US Bankruptcy Court for the Southern District of Texas revealed just how difficult the road has been for Washington Prime Group, owner of Polaris Fashion Place Mall and many others nationwide.
At the same time, a negotiated restructuring support agreement means that there is possibly some light at the end of that tunnel.
The agreement would remove over $900 million from balance sheets, and use $190 million to pay down revolving credit and term loan facilities. An equity rights offering and new creditor financing will assist with paying off secured debt and buttressing day-to-day operations.
While there was reference to the pandemic as a culprit, the long-standing changes in retailing and consumer habits also played a part in the weakening of Washington Prime. The company’s plans include two possible exit strategies: debt swap or sale of assets, according to court documents.
“The company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward,” CEO Lou Conforti said in a press release. “During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”
In March, Washington Prime reported a $262 million net loss in 2020, including a $111.4 million net loss in the fourth quarter alone. The company had $3.2 billion in debt overall as of the end of 2020, according to its most recent annual report.
