J.C. Penney denies hiring in-court restructuring advisers but still at the crossroads

New York – Earlier this month Reuters cited sources close to the matter, reporting that the retailer "hired advisers to explore debt restructuring options." The report, which cited people "familiar with the matter," called the move a "high-stakes attempt to get its financial house in order".

Responding to the news, J. C. Penney Company, Inc. (NYSE: JCP) issued the following statement: “As a public company, we routinely hire external advisors to evaluate opportunities for the Company. By working with some of the best firms in the industry, we are taking positive and proactive measures, as we have done in the past, to improve our capital structure and the long-term health of our balance sheet.”

J.C. Penney dismiss news regarding their hiring of advisers for an in-court restructuring

“We have no significant debt maturities coming due in the near term, and we continue to maintain a strong liquidity position. Also, given our strong liquidity position, we can confirm that we have not hired any advisers to prepare for an in-court restructuring or bankruptcy.”

J.C. Penney held 3.83 billion dollars in long-term debt at the end of the first quarter. That represented a 7 percent decline from a year ago, and a 3 percent increase from the fourth quarter. Just 50 million dollars of that debt matures this year, followed by 110 million dollars in 2020 and 118 million dollars in 2022, according to data referred to in the ‘Motley Fool’. But in 2023, the company faces a whopping 2.08 billion dollars in payments.

The company, which said it would close 18 department stores and nine home and furniture stores in 2019, finished the first quarter with just 171 million dollars in cash and equivalents.

As recalled by the ‘Motley Fool’, J.C. Penney's debt isn't fresh news for its investors, although they seem to worry about the retailer’s ability to manage that debt as comparable-store sales weaken and its losses widen. To this point, the department stores’ stock's price has declined 90 percent over the past three years.

A number of research firms recently commented on shares at J C Penney Company Inc (NYSE:JCP). Zacks Investment Research’s data shows that currently, six investment analysts have rated the stock with a sell rating and five have given a hold rating to the company. The stock has a consensus rating of “Sell” and a consensus price target of 2.53 dollars.

Photo credits: J.C. Penney Facebook

 

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