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 improve its balance sheet by reducing total indebtedness by approximately $880 million and extending maturity runway.
According to chairman and CEO Joseph F. Coradino, this reorganization is necessary due to economic challenges caused by the pandemic that have limited options for managing debt obligations despite efforts to enhance their portfolio through increased occupancy and diversified tenancy.
To facilitate this process, PREIT has secured commitments from investors led by Redwood Capital Management LLC and Nut Tree Capital Management LP totaling approximately $135 million in new money debtor-in-possession financing as well as exit revolver financing.
The company anticipates emerging from bankruptcy proceedings no later than early February 2024.
Image: Moorestown Mall located in Moorestown, NJ owned by PREIT.
