US-based department-store group JCPenney has filed a draft asset purchase agreement (APA) to sell the company with the previously announced letter of intent filed in September.
As reported, the retailer announced a tentative sale and restructuring agreement in September with mall landlords Brookfield Property Group and Simon Property Group.
The deal would see Brookfield and Simon acquire substantially all of JCPenney’s retail and operating assets (OpCo) for $1.75bn, which includes a combination of cash and new term loan debt. The agreement would also include the formation of a separate real-estate investment trust and a property holding company (PropCos), which would include 160 JCPenney real-estate assets and all of its owned distribution centers, which will be owned by the company’s Debtor-in-Possession and First Lien Lenders.
The OpCo and PropCos will enter into a master lease with respect to the properties and distribution centers moved into the PropCos.
A hearing to seek court approval for the transaction is expected to be scheduled for early November and, if the court approves, JCPenney expects to close the sale and emerge from bankruptcy proceedings ahead of the December holiday season.
In mid-October the retailer said it was to close 144 stores, according to documents filed in a US court.
Meanwhile, earlier this month, a group of minority lenders headed by Aurelius Capital Management filed a challenge to parts of the deal’s structure, claiming that the deal “unfairly” benefits the DIP Lenders and First Lien Creditors represented by Milbank LLP.
As reported, JCPenney filed for bankruptcy in May.