- Kristopher Fraser |
Ascena Retail Group Inc, the parent company of Ann Taylor, Loft, and Lane Bryant, is seeking a 150 million dollar loan from its creditors to keep the company functioning during their bankruptcy filing. Ascena is working on a restructuring plan that will also allow creditors to install new board members. The news was reported by Bloomberg.
The 150 million injection of capital would also cover 160 million dollars in debt that will become exit financing when Ascena completes its restructuring process. Ascena is using its bankruptcy process to turn an existing 1.2 billion dollar loan into a less than 100 million dollar obligation. According to Bloomberg, Ascena is expected to either pay down the loan or exchange the remaining debt into equity after reorganization.
Monarch Alternative Capital and Bain Capital, two of Ascena's largest creditors, will each be allowed to appoint a board member as part of the restructuring. Ascena is still planning to shutter 1200 to 3000 stores. Under bankruptcy law, they are allowed to keep a certain number of stores available while others can be sold under court supervision.
Ascena, like most brick-and-mortar retailers, shutdown in the wake of the coronavirus pandemic, which put a major dent in its sales. The company was already struggling prior to coronavirus, but the loss in sales aggrandized their increasingly dire situation. Ascena joins a growing list of American retailers who have filed for bankruptcy including J. Crew, Brooks Brothers, and Neiman Marcus Group.
photo: via anntaylor.com