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Empresa dueña de un centenar de centros comerciales se declara en bancarrota

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Washington Prime Group, que cuenta con un centenar de centros comerciales en todo el país, se declaró en bancarrota luego de un año complicado para los malls debido a la pandemia del Covid-19.

“La pandemia del Covid-19 ha creado desafíos importantes para muchas empresas, incluida Washington Prime Group, por lo que fue necesario acogerse al Capítulo 11 para reducir el deuda”, explicó la compañía.

El Capítulo 11 de la Ley de Quiebras permite a las empresas con problemas financieros reorganizarse bajo la protección de la ley.

La empresa con sede en Columbus, Ohio, es propietaria de importantes centros comerciales en todo el país, entre ellos nueve en Illinois, entre ellos Lincolnwood Town Center, Lake Plaza en Waukegan y Lake View Plaza en Orland Park.

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Washington Prime obtuvo 100 millones de dólares en nuevos fondos para “continuar en el curso normal sin interrupciones”, indicó la empresa en un comunicado.

“La reestructuración financiera de la empresa permitirá a Washington Prime dimensionar correctamente su balance y posicionar a la empresa para el éxito en el futuro”, dijo el director ejecutivo Lou Conforti. “Durante la reestructuración financiera, continuaremos trabajando para maximizar el valor de nuestros activos y nuestra infraestructura operativa”, agregó.

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A continuación el comunicado de la empresa:

WASHINGTON PRIME GROUP COMMENCES VOLUNTARY CHAPTER 11 FINANCIAL RESTRUCTURING WITH RSA SUPPORTED BY OVER 70% OF HOLDERS OF SECURED AND UNSECURED CORPORATE DEBT

Washington 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.

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.

Additional Information

Resources for the Company’s stakeholders, and other information on the Company’s financial restructuring, can be accessed by visiting the restructuring website at http://cases.primeclerk.com/washingtonprime. Court filings 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 washingtonprimeinfo@primeclerk.com.

Kirkland & Ellis LLP is serving as legal counsel to the Company, and Alvarez & Marsal North America, LLC is serving as restructuring advisor. Guggenheim Securities, LLC is serving as the Company’s investment banker. Davis Polk & Wardwell LLP is serving as legal counsel and Evercore Group L.L.C. is serving as investment banker and financial advisor to SVPGlobal. Wachtell, Lipton, Rosen & Katz is serving as legal counsel and PJT Partners LP is serving 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 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.

Forward-Looking Statements

This press release contains “forward-looking statements” related to future events. Forward-looking statements contain words such as “expect,” “anticipate,” “could,” “should,” “intend,” “plan,” “believe,” “seek,” “see,” “may,” “will,” “would,” or “target.” Forward-looking statements are based on management’s current expectations, beliefs, assumptions and estimates and may include, for example, statements regarding the voluntary cases commenced by Washington Prime Group Inc. (the “Company”) and certain of its subsidiaries (the “Chapter 11 Cases”), the Company’s ability to complete the restructuring and its ability to continue operating in the ordinary course while the Chapter 11 Cases are pending. These statements are subject to significant risks, uncertainties, and assumptions that are difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the forward-looking statements, including risks and uncertainties regarding the Company’s ability to successfully complete a restructuring under Chapter 11, including: consummation of the restructuring; potential adverse effects of the Chapter 11 Cases on the Company’s liquidity and results of operations; the Company’s ability to obtain timely approval by the Bankruptcy Court with respect to the motions filed in the Chapter 11 Cases; objections to the Company’s recapitalization process or other pleadings filed that could protract 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 arrangements; 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 the Chapter 11 Cases; the effects of the Chapter 11 Cases on the Company and on the interests of various constituents, including holders of the Company’s common stock and other equity securities; the Bankruptcy Court’s rulings in the Chapter 11 Cases, including the approvals of the terms and conditions of the restructuring and the outcome of the Chapter 11 Cases generally; the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Cases; risks associated with third party motions in the Chapter 11 Cases, which may interfere with the Company’s ability to consummate the restructuring or an alternative restructuring; increased administrative and legal costs related to the Chapter 11 process; potential delays in the Chapter 11 process due to the effects of the COVID-19 virus; and other litigation and inherent risks involved in a bankruptcy process. Forward-looking statements are also subject to the risk factors and cautionary language described from time to time in the reports the Company files with the U.S. Securities and Exchange Commission, including those in the Company’s most recent Annual Report on Form 10-K and any updates thereto 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 be materially different than those expressed in such 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 Company’s securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities in the Chapter 11 Cases. Holders of shares of the Company’s common stock and other equity securities could experience a complete loss on their investment, depending on the outcome of the Chapter 11 Cases.

 

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