This is How Jc Penney Could Be Rescued From Bankruptcy

U.S. mall owners Simon and Brookfield could be saving JC Penney from bankruptcy in an $800 million deal according to a CNBC report.

The owners are close to finalizing an $800 million deal to rescue J.C. Penney from bankruptcy which would avoid a total liquidation and save about 70,000 jobs and 650 stores.

Simon owns five metro Atlanta properties, including Lenox Square, Phipps Plaza, Mall of Georgia, Town Center at Cobb and Sugarloaf Mills.

Joshua Sussberg of the law firm Kirkland & Ellis revealed the news during a court hearing on Wednesday and also said that Simon and Brookfield will pay roughly $300 million in cash and assume $500 million in debt.
Once the transaction is complete, Wells Fargo has also agreed to give JC Penney $2 billion in revolving credit. This would leave the retailer with $1 billion in cash according to Sussberg.

JC Penney plans to seek approval from the bankruptcy judge for this rescue deal early next month.

The struggling retailer had filed for Chapter 11 bankruptcy protection in May. It had nearly 850 locations at the time. Last year the company reported net sales of $10.7 billion in 2019, down from $12.6 billion in 2015.

Sussberg also said that the enterprise value of the Simon-Brookfield deal, including the value of assumed debt, is $1.75 billion. He previously said that Penney’s unencumbered real estate was valued at $1.4 billion when the lights are on, and $704 million when they’re dark.

Any deal by Simon and Brookfield is still subject to court approval and competing bids.

When Forever 21 filed for bankruptcy, Simon and Brookfield put in the $81.1 million to buy the fashion retailer, which kept stores open at 100 mall locations.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.