“Signing a definitive APA with Brookfield, Simon and our Majority First Lien Lenders allows us to move forward towards the completion of our financial restructuring – and we are looking forward to operating under new ownership outside Chapter 11 in advance of the 2020 holiday season,” said Jill Soltau, chief executive officer of JCPenney. “This transaction is a testament to the thousands of dedicated employees who have been working incredibly hard over the last several months under difficult circumstances. Our customers are at the heart of JCPenney and we look forward to serving them under the JCPenney banner for decades to come. Our team remains laser-focused on implementing our Plan for Renewal to Offer Compelling Merchandise, Drive Traffic, Deliver an Engaging Experience, Fuel Growth, and Build a Results-Minded Culture.”
Key terms Of The APA re:
- Brookfield and Simon will acquire substantially all of JCPenney’s retail and operating assets (OpCo) through a combination of cash and new term loan debt;
- The formation of separate property holding companies (PropCos), comprising 160 of the company’s real estate assets and all of its owned distribution centers, which will be owned by the Company’s DIP and First Lien Lenders; AND
- The OpCo and PropCos will enter into master leases with respect to the properties and distribution centers moved into the PropCos (Master Lease Agreement). JCPenney, Simon and Brookfield, and the Majority Lender Group have reached an agreement on all outstanding business points in the Master Lease Agreement.
As previously announced, JCPenney entered into a restructuring support agreement with lenders of its first-lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position. To implement the financial restructuring plan, the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Additional information regarding JCPenney’s financial restructuring is available at jcprestructuring.com.
Photo courtesy JCPenney