CHATTANOOGA, Tenn. (WAND) - The owner of Hickory Point Mall in Forsyth reached a restructuring support agreement with its debt holders.
CBL Properties, based in Chattanooga, Tenn., said is planning to make its filing for Chapter 11 bankruptcy by Oct. 1, 2020. The steps the company has taken came after many of its properties took a big financial hit from the COVID-19 pandemic.
According to CNBC, CBL's securities filing said the agreement terms provide for a "comprehensive restructuring" of the company's capital through an in-court process. CBL will be able to slash $900 million in debt and another $600 million in other obligations, per the company.
CBL is planning to eventually eliminate about $1.4 billion of unsecured notes in exchange for $500 million of new senior secured notes that would be due in June 2028, CNBC said. CBL would also get approximately $50 million in cash and about 90% of new common equity in the REIT to unsecured note holders.
“Reaching this agreement with our noteholders is a major milestone for CBL,” a statement from Chief Executive Stephen Lebovitz said. “The agreement will significantly improve our balance sheet by reducing leverage and increasing net cash flow and will simplify our capital structure, providing enhanced financial flexibility going forward.”
Operations at CBL properties will continue normally as restructuring happens, the company said.
The company has the help of about $220 million in cash, which is available right now, to cover operational and restructuring needs.
