In a decision that allows the company to emerge from Chapter 11, the Bankruptcy Court for the Southern District of Texas issued a ruling confirming Neiman Marcus Group’s plan of reorganization.
The company said the decision will allow Neiman Marcus to emerge from Chapter 11 proceedings with a substantially reduced debt load and significant new funding in a strengthened capital structure. In line with the court’s ruling, the company noted that it intends to emerge by September 30 once all conditions have been finalized with the full support of its creditors and new equity shareholders.
Neiman Marcus indicated that it expects to operate with a strengthened capital structure that will eliminate more than $4 billion of existing debt and more than $200 million of interest expense, with no near-term maturities. A group of institutional investors will fund a $750 million exit financing package that will fully refinance debtor in possession funding and provide significant additional liquidity for the business. Such financing is strategically aligned with the company’s new equity shareholders, and the exit term loan financing is in addition to the liquidity provided by the $900 million asset-based loan led by Bank of America and including a consortium of commercial banks. With the exit financing and existing ABL, Neiman Marcus maintained that it has the strategic capital available to support the company’s business and transformation initiatives through emergence and beyond.
Geoffroy van Raemdonck, Neiman Marcus, chairman and CEO, said, “This is an important milestone in our Chapter 11 process and an exciting day for the future of our company, as it sets the stage for our emergence. Throughout this process, I’ve been so impressed by the commitment of our associates, who continue to extend passion and love for our customers. I’m also grateful to our brand partners for standing with us and believing in our business. I remain inspired by the opportunity to continue to surprise and delight our customers online, in-store, and at home as we continue on our journey to become the preeminent luxury platform. Even in a continually evolving retail environment, we continue to succeed and exceed our budget. NMG is positioned to win thanks to our differentiated and deep customer-associate relationships, the mutual trust of our lenders and brand partners, and our accelerated digital transformation.”