As it tries to navigate the challenges of COVID-19, Philadelphia-based PREIT, co-owner of the Lehigh Valley Mall, filed for Chapter 11 bankruptcy Sunday, a move it said will help it restructure.
On Oct. 14, the real estate investment trust entered into a Restructuring Support Agreement with its bank lenders. It said those banks have agreed to provide another $150 million to help PREIT recapitalize and extend its debt maturity schedule.
In a release, PREIT said the bankruptcy filing will help ensure that it can continue operations while it obtains necessary approvals for its financial restructuring plan.
“Today’s announcement has no impact on our operations – our employees, tenants, vendors and the communities we serve –and we remain committed to continuing to deliver top-tier experiences and improving our portfolio. With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multi-use ecosystems throughout our portfolio,” said Joseph Coradino, CEO of PREIT.
The company will pay all vendors, suppliers and employees during the Chapter 11 process, he said, adding that the bankruptcy should not impact shareholders. PREIT’s common and preferred shares will continue to trade.
“We are pleased to be moving forward with strengthening the company’s balance sheet and positioning it for long-term success through our prepackaged plan. We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis,” he said.