HOUSTON: Washington Prime Group Inc, a real estate investment trust that operates enclosed malls and strip centres across the United States, filed for bankruptcy after the Covid-19 pandemic curtailed in-person shopping.
The Chapter 11 filing in Houston will allow Washington Prime to continue operating while it seeks to implement a restructuring agreement that it reached with certain creditors, according to a board resolution filed with the bankruptcy petition.
The company, which estimated its assets at about US$4bil (RM16.46bil) and debt of almost US$3.5bil (RM14.41bil), secured an up to US$100mil (RM411.60mil) debtor-in-possession loan that would help fund operations during court proceedings.
The Columbus, Ohio-based firm that operates around 100 malls, saw its bonds tumble into distressed territory in 2020 as rent collections dried up and tenants filed for bankruptcy or went out of business.
In May 2017, it sold a stake in six mall properties for millions.
It began negotiating with its creditors last year and skipped a US$23mil (RM94.67mil) bond interest payment in February.
Creditors had been extending a forbearance agreement amid the talks.
Washington Prime said it filed the Chapter 11 after executing a restructuring support agreement with creditors that hold about 73% of the principal outstanding of secured corporate debt and 67% of the unsecured notes.
The firm aims to deleverage its balance sheet by nearly US$950mil (RM3.91bil), according to a company statement.
Bloomberg News previously reported that Washington Prime was weighing a bankruptcy filing as talks faltered. ― Bloomberg