Washington Prime Group Commences Voluntary Chapter 11 Financial Restructuring with RSA Supported by Over 70% of Holders of Secured and Unsecured Corporate Debt | National
COLUMBUS, Ohio – (BUSINESS WIRE) – June 13, 2021–
Washington Prime Group Inc. (NYSE: WPG) today announced that it and some of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Search”). The Company enters Chapter 11 after signing a Restructuring Support Agreement (the “RSA”) with creditors, led by SVPGlobal, who own approximately 73% of the principal amount of outstanding corporate secured debt of the Company and 67% of the principal amount outstanding of the unsecured notes of the Company (collectively, “consenting creditors”). The Company will use Chapter 11 to set out implements a comprehensive and consensual financial restructuring of the Company’s debt at the corporate level that will allow the Company to significantly reduce its balance sheet and strengthen its business and operations in the future, either through a full capitalization of the unsecured assets of the Note Company or a value-maximizing alternative transaction that would repay, in full in cash, all of the Company’s debt at the enterprise level.
Importantly, the Washington Prime Group has secured $ 100 million in new debtor-in-possession financing from willing creditors to support day-to-day operations during the Chapter 11 process and ensure that all business operations continue as normal without interruption. . Washington Prime Group guests, retailers and business partners can expect business as usual in all of the company’s shopping downtowns throughout the process.
The RSA provides for a deleveraging of the Company’s balance sheet of nearly $ 950 million through the shareholding of unsecured notes and a repayment of $ 190 million of the Company’s revolving credit and term loan facilities. RSA is considering a $ 325 million equity offer, fully backed by SVPGlobal, as a sponsor of the plan, the proceeds of which will be used, among other things, to repay secured debt. The RSA also provides for an effective four-year extension of the remaining debt of the credit facility, full payment of all receivables held by vendors and service providers, and a basic collection for holders of common shares and Company’s existing preferred stock of $ 40 million in cash or 6.125% of new equity (subject to dilution). Additionally, the RSA allows the Company to market its assets to determine whether one or more alternative transactions that would pay off existing corporate debt in full, in cash, and provide larger aggregate recoveries to holders of common stock and existing privileges are achievable. The RSA also includes some milestones, including a 60-day milestone for the bankruptcy court to issue an order upholding the Chapter 11 plan, subject to certain extensions.
Lou Conforti, CEO and Director of Washington Prime Group, said, “The financial restructuring of the company will allow WPG to adjust its balance sheet and position the company for success going forward. During the financial restructuring, we will continue to work to maximize the value of our assets and operating infrastructure. The Company expects operations to continue in the normal course for the benefit of our customers, tenants, suppliers, stakeholders and colleagues. “
The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, which necessitated a Chapter 11 filing to reduce the company’s outstanding debt. Throughout the restructuring process, the Company remains committed to serving as a preeminent operator of commercial city centers and will continue to serve its customers. Above all, the Company will continue to put the health and safety of our customers, retailers, employees and communities first.
The Company has filed a number of customary motions on day one with the bankruptcy court, which will allow the Company to continue operating in the normal course. Certain subsidiaries, including joint ventures of the Company and the majority of the Company’s special purpose entities holding properties securing mortgages will not be in debt in Chapter 11 cases. The Company also plans to continue to honor the service of the Company. debt and other financial obligations, as required, under its property-level secured loans and joint venture partnerships.
Resources for the Company’s stakeholders and other information on the financial restructuring of the Company can be found by visiting the restructuring website at http://cases.primeclerk.com/washingtonprime. Court records and other documents related to the Chapter 11 process are available at http://cases.primeclerk.com/washingtonprime, by calling the company’s claims agent, Prime Clerk, at (877) 329-1913 (toll free) or (347) 919-5772 (international) or by emailing firstname.lastname@example.org.
Kirkland & Ellis LLP is acting as legal counsel to the Company, and Alvarez & Marsal North America, LLC as restructuring counsel. Guggenheim Securities, LLC is the Company’s investment banker. Davis Polk & Wardwell LLP acts as legal counsel and Evercore Group LLC as investment banker and financial advisor to SVPGlobal. Wachtell, Lipton, Rosen & Katz acts as legal advisor and PJT Partners LP acts as investment banker for an ad hoc group of consenting creditors.
About Washington Prime Group
Washington Prime Group Inc. is a retail REIT and a recognized leader in the ownership, management, acquisition and development of retail real estate. The Company combines a national real estate portfolio with its expertise across the shopping center industry to increase cash flow through rigorous asset management and provide new opportunities for retailers seeking growth in the United States. Washington Prime Group® is a registered trademark of the Company. Learn more about www.washingtonprime.com.
SVPGlobal is a global investment firm focused on distressed debt, special situations and private equity opportunities with over $ 15 billion in assets under management. The company, founded by Victor Khosla in 2001, has 127 employees, including 49 investment professionals, located in its main offices in Greenwich (CT), London and Tokyo. Learn more about www.svpglobal.com.
This press release contains “forward-looking statements” relating to future events. Forward-looking statements contain words such as “expect”, “anticipate”, “might”, “should”, “intend”, “plan”, “believe”, “seek”, “see” , “Could”, “,“ would ”or“ target. ”Forward-looking statements are based on management’s current expectations, beliefs, assumptions and estimates and may include, for example, statements regarding willful cases brought by Washington Prime Group Inc. (the “Company”) and certain of its subsidiaries (the “Chapter 11 Boxes”), the Company’s ability to complete the restructuring and its ability to continue operating in the normal course while the Events of the Chapter 11. These statements are subject to significant risks, uncertainties and assumptions which are difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the statements. s forward-looking, including risks and uncertainties regarding the Company’s ability to complete a Chapter 11 restructuring, including: completion of the restructuring; the potential negative effects of the Chapter 11 business on the Company’s liquidity and operating results; the Company’s ability to obtain timely bankruptcy court approval with respect to petitions filed in Chapter 11 cases; objections to the Company’s recapitalization process or to other pleadings filed that could prolong the Chapter 11 cases; employee attrition and the Company’s ability to retain senior management and other key personnel due to the distractions and uncertainties imposed in part by the Chapter 11 cases; the Company’s ability to comply with financing agreements; the Company’s ability to maintain relationships with its tenants, suppliers, customers, employees, sponsors and other third parties and regulatory authorities as a result of Chapter 11 Cases; the effects of the Chapter 11 Business on the Company and on the interests of various constituents, including holders of common shares and other equity securities of the Company; bankruptcy court rulings in Chapter 11 cases, including approvals of the terms and conditions of the restructuring and the outcome of Chapter 11 cases generally; the length of time the Company will operate under Chapter 11 protection and the continued availability of working capital during the life of Chapter 11 business; risks associated with third party claims in Chapter 11 matters, which may interfere with the Company’s ability to complete the restructuring or alternative restructuring; increased administrative and legal costs associated with the Chapter 11 process; potential delays in the Chapter 11 process due to the effects of the COVID-19 virus; and other disputes and risks inherent in a bankruptcy process. Forward-looking statements are also subject to the risk factors and caveats described from time to time in the Company’s reports to the United States Securities and Exchange Commission, including those set out in the most recent annual report. of the Company on Form 10-K and any updates. about this in the company’s quarterly reports on Form 10-Q and current reports on Form 8-K. These risks and uncertainties may cause actual future results to differ materially from those expressed in these forward-looking statements. The Company has no obligation to update or revise these forward-looking statements and does not undertake to do so.
The Company cautions that trading in the securities of the Company during the life of Chapter 11 business is highly speculative and poses substantial risks. The trading prices of the securities of the Company may have little or no relation to the actual collection, if any, by the holders of securities of the Company in the cases of Chapter 11. The holders of ordinary shares of the Company and other equity securities may suffer a total loss on their investment, depending on the outcome of Chapter 11 matters.
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CONTACT: Media: Media.Relations@washingtonprime.com
KEYWORD: OHIO UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: OTHER CONSTRUCTION AND REAL ESTATE COMMERCIAL BUILDING AND REAL ESTATE CONSTRUCTION AND REAL ESTATE REIT
SOURCE: Washington Prime Group Inc.
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PUB: 06/13/2021 22:42 / DISC: 06/13/2021 22:42