Mall owner Washington Prime files for chapter 11 bankruptcy protection
June 13 (Reuters) – The owner of the Washington Prime Group shopping center (WPG.N) filed for Chapter 11 bankruptcy on Sunday after the COVID-19 pandemic forced him to temporarily shut down some of his few. 100 malls across the United States and that businesses couldn’t afford to pay him rent.
The company’s estimated assets ranged from $ 1 billion to $ 10 billion, as did its estimated liabilities, according to a filing with the United States bankruptcy court for the Southern District of Texas.
Reuters previously reported that the Columbus, Ohio-based company, formed in 2014 following a spin-off from shopping center giant Simon Property Group Inc, was preparing to file for bankruptcy protection as soon as that week. Read more
The company said it had secured $ 100 million in so-called debtor-in-use financing to help operations during the bankruptcy proceedings, adding that it had entered into a restructuring support agreement with creditors led by SVPGlobal.
The deal calls for nearly $ 950 million in deleveraging the company’s balance sheet, Washington Prime said on Sunday. The deal contemplates a $ 325 million equity rights offer, according to the company.
The fallout from last year’s pandemic forced Washington Prime to close some properties for a period of time and ease rent collection from its tenants, slashing the mall owner’s finances.
During the throes of the pandemic in 2020, Washington Prime’s rental income fell about $ 127 million from 2019 levels due to the coronavirus outbreak.
In the first three months of this year, Washington Prime’s rental income decreased by approximately $ 20 million compared to the same period in 2020. Its cash flow from operations for the three months ending in March were $ 3.3 million, a drop from $ 10 million during the same period. times in 2020.
The US economy is now rebounding strongly with more than 140 million Americans fully vaccinated and businesses reopening.
Nonetheless, previous government stay-at-home orders and business closures designed to slow the pandemic crushed the bottom line for many retailers, jeopardizing their ability to pay rent to landlords like Washington Prime.
Other mall owners such as CBL & Associates Properties Inc (CBLAQ.PK) and Pennsylvania Real Estate Investment Trust (PEI.N) filed for bankruptcy last year.
Report by Kanishka Singh in Bengaluru; Editing by Stephen Coates
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