Majors

Mall Owner Washington Prime Group Files for Chapter 11

MajorsJun 17, 2021

Mall Owner Washington Prime Group Files for Chapter 11

The company is implementing a restructuring plan after struggling amid the COVID-19 pandemic.

Real estate investment trust Washington Prime Group has put a restructuring plan in place after filing for Chapter 11 bankruptcy protection last week.
Columbus, Ohio—Mall owner Washington Prime Group filed for Chapter 11 bankruptcy protection last week as COVID-19 continues to take a toll on shopping centers.
 
The real estate investment trust, which was spun-off from fellow mall owner Simon Property Group in 2014, owns open-air and enclosed shopping areas, with many locations in the Midwest.
 
Its estimated assets and liabilities both ranged from $1 billion to $10 billion, according to a filing in the United States Bankruptcy Court for the Southern District of Texas.
 
Rent collections stalled amid the pandemic as many of its retailer tenants filed for bankruptcy.
 
“The COVID-19 pandemic has created significant challenges for many consumer-facing companies, including Washington Prime Group. The company has determined that the Chapter 11 path is the most effective next step to resolve the company’s outstanding indebtedness as we emerge from the pandemic,” a company spokesperson said in an email to National Jeweler.
 
Business is expected to carry on as usual while the restructuring plan gets underway.
 
As part of its restructuring support agreement with creditors, led by SVPGlobal, the company secured $100 million of debtor-in-possession financing, a type of financing extended to companies in distress that is overseen by the lender and subject to court approval.

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The agreement will reduce its debt level by nearly $950 million, the company said in a press release about the restructuring plan.
 
It is also considering a $325 million equity rights offering to pay down its debt.
 
“The company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward,” said Washington Prime Group CEO and Director Lou Conforti in a press release.
 
It was a rough year for mall owners as COVID-19 restrictions temporarily shuttered shopping centers. Mall owners CBL Properties and Pennsylvania Real Estate Investment Trust also filed for bankruptcy last year.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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