COLUMBUS, Ohio — Washington Prime Group, which owns more than 100 mall locations nationwide, filed for Chapter 11 bankruptcy late Sunday, citing pandemic-related hardships.
The Columbus, Ohio-based company issued a news release stating it had secured $100 million in debtor-in-possession financing to continue funding operations while it restructures debt incurred while the COVID-19 pandemic crushed both foot traffic and revenue for malls, the Chicago Tribune reported.
Specifically, the company is seeking to deleverage an estimated $1 billion in debt, incurred primarily by temporary mall closures and relaxation of rent requirements for some tenants, CNN Business reported.
Customers at Washington Prime Group properties should expect “business as usual” throughout the process, the company stated.
According to the mall owner’s website, Washington Prime Group’s 100 locations are heavily concentrated in the Midwest, along the East Coast and in Florida, the Tribune reported.
The company stated that it has reached agreements with creditors who own 73% of the company’s secured debt and restructuring that burden will allow the mall owner to “strengthen its business and operations going forward.”
“During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure,” CEO Lou Conforti stated in the news release. “The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”
According to company filings, Washington Prime Group’s rent revenue decreased roughly 20% from $633.6 million in 2019 to $506.7 million in 2020, the Tribune reported.
“The bankruptcy shows that while things are now getting back to normal, many of the scars left by the pandemic have not fully healed,” Neil Saunders, retail analyst and managing director at GlobalData, told CNN Business.
“Strong balance sheets and sound operations are needed to see property companies through this period. Washington Prime did not have those fundamentals and so has chosen Chapter 11 as a way to restructure and pay down its debts,” Saunders added.
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