Southern Park Mall owner Washington Prime Group files for bankruptcy
COLUMBUS — Washington Prime Group, which owns Boardman's Southern Park Mall, announced it's filed for Chapter 11 bankruptcy.
The company has executed a restructuring support agreement with creditors holding nearly three-quarters of the company's outstanding secured corporate debt and more than two-thirds of its unsecured notes.
From a recent news release: "The company will utilize Chapter 11 to implement a comprehensive and consensual financial restructuring of the Company's corporate-level debt that will allow the company to substantially deleverage its balance sheet and strengthen its business and operations going forward, either through a full equitization of the company's unsecured notes or an alternative value-maximizing transaction that would repay, in full in cash, all of the company's corporate-level debt."
The company has also secured $100 million in debtor-in-possession financing to keep operations going through bankruptcy proceedings. The company said retailers and their customers can expect "business as usual" at all its locations during the proceedings.
That kind of financing is often used to help companies that are in financial distress and can help get the business back on its feet or keep it going until it can be sold. It's debt that takes priority over all the company's other debts.
The restructuring agreement would deleverage the company's balance sheet by nearly $950 million "through equitization of unsecured notes" and pay down the company's revolving credit and loan facilities by $190 million. A $325 million equity rights offering — which allows existing shareholders to buy more shares, often discounted — is also being considered. The agreement also extends credit facility debt another four years.
"The company's financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward," Washington Prime CEO Lou Conforti is quoted in a 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."
Certain Washington Prime subsidiaries, including its joint ventures and special purpose entities holding mortgaged properties, won't be included as debtors.
"The company also anticipates continuing to meet all debt service and other financial obligations, as required, under its property-level secured loans and joint venture partnerships," reads the release.
The company's first bankruptcy court hearing is set for this afternoon.
The company has posted a FAQ sheet on its restructuring for tenants and investors.
Shares of Washington Prime Group (NYSE: WPG) fell nearly 60 percent, more than 2 1/2 points, after the bankruptcy filing was announced Sunday.
This story was originally published June 14, 2021 at 10:52 AM with the headline "Southern Park Mall owner Washington Prime Group files for bankruptcy."