According to a press release, the retailer has now filed a draft asset purchase agreement, which brings the department store chain one step closer to a sale with mall owners Brookfield Asset Management and Simon Property Group.
|SPG||SIMON PROPERTY GROUP INC.||128.82||+3.93||+3.15%|
Brookfield and Simon will acquire all of JCPenney's retail and operating assets through an $800 million deal comprised of $300 million in cash and $500 million in new term loan debt. Meanwhile, a group of First Lien Lenders will own 160 of the company's real estate assets and distribution centers as part of a separate property holding company.
The deal is still subject to court approval and other closing conditions, with a hearing expected to be scheduled for early November. If court approval is received and the closing conditions in the APA are met, it is expected that the sale will close in advance of the December 2020 holiday season.
JCPenney’s operating assets will then conduct business outside of the Chapter 11 process under the JCPenney banner with Simon and Brookfield as its owners. The first lien lenders are expected to acquire ownership through JCPenney's reorganization plan, which will be completed following the closing of the transaction.
Plans for the rescue deal were first announced in September by lawyer Joshua Sussberg of Kirkland & Ellis, who said the move would save roughly 70,000 jobs and 650 stores.