Press "Enter" to skip to content

Outlet Collection Owner Washington Prime Group Files for Chapter 11 Bankruptcy

Press ReleaseWashington Prime Group Inc. (NYSE: WPG) today announced that it and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).

The Company enters Chapter 11 after executing a restructuring support agreement (the “RSA”) with creditors, led by SVPGlobal, that hold approximately 73% of the principal amount outstanding of the Company’s secured corporate debt and 67% of the principal amount outstanding of the Company’s unsecured notes (collectively, the “Consenting Creditors”). 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.

Operations Will Continue Uninterrupted and in the Ordinary Course During Restructuring

Importantly, Washington Prime Group has secured $100 million in new money debtor-in-possession financing from the Consenting Creditors to support day-to-day operations during the Chapter 11 process and ensure that all business operations continue in the ordinary course without interruption. Washington Prime Group’s guests, retailers and business partners can expect business as usual at all of the Company’s retail town centers throughout the proceedings.

The RSA provides for a deleveraging of the Company’s balance sheet by nearly $950 million through the equitization of unsecured notes and a $190 million paydown of the Company’s revolving credit and term loan facilities. The RSA contemplates a $325 million equity rights offering, fully backstopped by SVPGlobal, as Plan Sponsor, the proceeds of which will be applied to, among other things, the pay down of secured debt. The RSA also provides for an effective four-year extension of the remaining credit facility debt, payment in full of all claims held by vendors and service providers, and a baseline recovery for the Company’s existing common and preferred equity holders 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 any alternative transaction or transactions that would pay existing corporate indebtedness in full, in cash, and deliver greater aggregate recoveries to existing common and preferred equity holders are attainable. The RSA also includes certain milestones, including a 60-day milestone for the Bankruptcy Court to enter an order confirming the Chapter 11 plan, subject to certain extensions.

Lou Conforti, CEO, and Director of Washington Prime Group, stated: “The Company’s financial restructuring will enable WPG to right size its balance sheet and position the Company for success going forward. 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.”

The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the Company’s outstanding indebtedness. Throughout the restructuring process, the Company remains committed to serving as a preeminent operator of retail town centers and will continue to serve its guests. Importantly, the Company will continue to prioritize the health and safety of our guests, retailers, employees, and communities.

The Company has filed a number of customary first day motions with the Bankruptcy Court that will allow the Company to continue operations in the ordinary course. Certain subsidiaries, including the Company’s joint ventures and the majority of the Company’s special purpose entities holding properties that secure mortgage loans, will not be debtors in the Chapter 11 cases. 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.

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 properties. The Company combines a national real estate portfolio with its expertise across the entire shopping center sector to increase cash flow through rigorous management of assets and provide new opportunities to retailers looking for growth throughout the U.S. Washington Prime Group® is a registered trademark of the Company. Learn more at www.washingtonprime.com.

About SVPGlobal

SVPGlobal is a global investment firm focused on distressed debt, special situations and private equity opportunities with more than $15 billion in assets under management. The firm, established by Victor Khosla in 2001, has 127 employees, including 49 investment professionals, across its main offices in Greenwich (CT), London and Tokyo. Learn more at www.svpglobal.com.


The above is a press release from Business Wire.  The Auburn Examiner has not independently verified its contents and encourages our readers to personally verify any information they find may be overly biased or questionable. The publication of this press release does not indicate an endorsement of its content. 

Subscribe to our FREE newsletter and never miss an Auburn Examiner article or update!
Auburn examiner, auburn wa news, local auburn wa news, today in auburn wa

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *