J. Jill Gets Lenders Consent, Averting Bankruptcy Filing
(Bloomberg) -- Women’s clothing chain J. Jill Inc. said it has obtained a consent from lenders to extend certain maturities of its term loans, helping the struggling retailer avert a bankruptcy filing.
J. Jill had said previously that it planned to seek Chapter 11 protection if it didn’t secure the necessary consents. The company said in a statement that the agreement provides it with additional liquidity and financial flexibility to meet its obligations.
The company received permission from lenders holding 97.8% of its term loans to proceed with the out-of-court financial restructuring transaction, which extends the maturity of the term-loan debt to May 2024. The transaction is expected to close on or about Sept. 30.
J. Jill earlier this month struck a deal with lenders holding 70% of the debt to extend certain maturities to 2024, grant a financial covenant holiday and provide for at least $15 million of new cash in the form of a junior term loan. The chain on Friday recorded a narrower loss for its fiscal second quarter, which included an almost 50% sales decline.
The Covid-19 pandemic forced the Quincy, Massachusetts-based company to temporarily close its more than 280 U.S. stores in March. Lenders agreed to hold off on taking immediate action against the company after it violated terms of its loans, J. Jill said in a June news release.
The company warned in June that the challenges related to Covid-19 had raised “substantial doubt” about its ability to survive. But like many struggling retailers, its problems predated the virus. J. Jill has struggled to find the right fashion to appeal to its customers, who were shifting spending to new online merchants and other categories. Shares of the company have lost more than 96% of their value since the firm went public in 2017.
Centerview Partners is serving as the company’s financial adviser and investment banker while AlixPartners is the company’s restructuring adviser.
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