Philadelphia-based shopping center PREIT announced on Monday that it has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company’s prepackaged reorganization plan, which received unanimous support from its first- and second-lien lenders, aims to strengthen its balance sheet by reducing total indebtedness by approximately $880 million and extending maturity dates.
According to chairman and CEO Joseph F. Coradino, PREIT has been diligently working to improve its portfolio, increase occupancy rates, and diversify tenant mix following disruptions caused by the pandemic. However, challenging economic conditions have limited their options regarding debt obligations as operational successes were met with inflation and rising interest rates.
To aid in this restructuring process, PREIT has secured commitments for new financing totaling around $135 million from investors led by Redwood Capital Management LLC and Nut Tree Capital Management LP.
The company anticipates emerging from bankruptcy proceedings no later than February 2024.
Image: Moorestown Mall in Moorestown NJ is owned by PREIT.
