As it works to its emergence from Chapter 11 bankruptcy, J.C. Penney has finalized its asset purchase agreement with Brookfield Asset Management, Simon Property Group and a majority of the company’s DIP and first lien lenders.
Key terms include:
- Brookfield and Simon will acquire substantially all of J.C. Penney’s retail and operating assets through a combination of cash and new term loan debt.
- The formation of separate property holding companies that will take possession of 160 of J.C. Penney’s real estate assets and all of its owned distribution centers, which will become property of the company’s DIP and first lien lenders.
- The operating assets and property holding companies will enter into master leases with respect to the properties and distribution centers moved into the property holding companies. J.C. Penney noted that it, Simon and Brookfield, and the majority lender group have reached agreement on all outstanding business points in the master lease agreement.
“Signing a definitive APA with Brookfield, Simon and our majority first lien lenders allows us to move forward towards the completion of our financial restructuring, and we are looking forward to operating under new ownership outside Chapter 11 in advance of the 2020 holiday season,” said Jill Soltau, J.C. Penney CEO. “This transaction is a testament to the thousands of dedicated employees who have been working incredibly hard over the last several months under difficult circumstances. Our customers are at the heart of J.C. Penney and we look forward to serving them under the J.C. Penney banner for decades to come. Our team remains laser focused on implementing our plan for renewal to offer compelling merchandise, drive traffic, deliver an engaging experience, fuel growth and build a results-minded culture.”