Private equity-backed Neiman Marcus Group is reportedly prepping to seek bankruptcy protection as early as this week as the debt-heavy business reels from the pressure of the coronavirus crisis.
Neiman, which has a $4.8bn debt load, has been in discussion lenders about a potential bankruptcy loan to keep the lights after being forced to close its stores due to the coronavirus pandemic.
It began holding confidential discussions with bondholders about possible financing earlier this month, Reuters reported at the time.
The news outlet now says the group is in the final stages of negotiating a loan with its creditors totaling hundreds of millions of dollars, which would sustain some of its operations during bankruptcy proceedings. It cited unnamed sources.
Reuters added that Neiman Marcus missed millions of dollars in debt payments last week, including one that only gave the company a few days to avoid a default.
Neiman avoided a bankruptcy filing last year after reaching a deal with creditors, but has been thrown into turmoil again after closing its 43 branded stores across the US, as well as two Bergdorf Goodman stores in New York and 24 Last Call locations.
The majority of Neiman’s $4.3bn debt load comes from its $6bn leveraged buyout in 2013, when Ares Management and the CPPIB acquired it from other private equity firms.
Neiman Marcus was in talks three years ago regarding a partial or full sale of the company, Reuters reported at the time, but went on to shelve plans for buyout by trade-buyer Hudson’s Bay and potential IPO.
Copyright © 2020 AltAssets