Every second retailer has been fighting survival ever since the pandemic hit the globe in late February.
For the US-based Ascena Group, which owns Ann Taylor and Lane Bryant, it seems to be a never ending struggle. The retailer had recently announced to close around 1,200 stores as it was preparing to file Chapter 11.
And now the retailer is, reportedly, seeking US $ 150 million of new loan from its lenders so as to finance its operations in its efforts to restructure amidst bankruptcy.
Ascena’s restructuring plans would also allow creditors to appoint new board members, and in these lines Monarch Alternative Capital and Bain Capital – two of its most active lenders – will appoint 1 member each to Ascena’s board.
The new money portion of the debtor-in-possession (DIP) loan may pay 2.5 per cent interest and would be backed by existing lenders.
Here it is important to note that besides fresh funds, DIP loan will also feature US $ 160 million of existing debt, which will become exit financing once Ascena concludes the in-court revamping process.
The Group is looking at Chapter 11 as a means to convert its current debt of US $ 1.1 billion to less than US $ 100 million.
Known for its womenswear, Ascena generates revenue of US $ 5.493 billion.
Watch out for this space to know further developments!