Restructuring
On December 10, 2023, PREIT (OTCQB: PRET) announced it took a key step in executing the recapitalization of its business, significantly reducing debt and setting a path forward. The Company has filed a voluntary petition known as a “prepackaged” reorganization under Chapter 11 of the United States Bankruptcy Code.
The plan will allow the Company to reduce debt by approximately $880 million and strengthen its balance sheet, in order to compete effectively, meet obligations, and continue providing tenants, customers, and communities with the safe, high-quality shopping experience they expect at each property.
During this process, PREIT will continue all business operations without interruption while it obtains necessary approvals of its financial restructuring plan. In advance of the filing, the Company executed a Restructuring Support Agreement (“RSA”) with 100% of its First and Second Lien Lenders. In accordance with the RSA, PREIT expects it will be able to emerge from Bankruptcy by early February 2024.
PREIT will pay all vendors, suppliers and employees during the course of the Chapter 11, and pursuant to the terms of the Prepackaged Plan, which will be subject to court approval, the prepetition claims of all vendors, suppliers, and employees also will be unimpaired.
The goal of this Chapter 11 filing is to establish more balanced financial footing going forward. It will enable the Company to streamline costs in certain areas of the business while freeing up capital to invest in core business. By taking this step, the Company aims to enrich its business and continue to create value to tenants, customers, and employees alike. Effectuating this plan will allow PREIT to continue its legacy as an integral part of its communities as both a significant employer and a committed investor in the development of its properties.
We are confident this process will result in a stronger, better-capitalized company as we continue advancing PREIT’s legacy. The business will continue operating as normal, and will continue working with its tenants, vendors and suppliers in the ordinary course.
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