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COLUMBUS, Ohio – Washington Prime Group, which owns more than 100 malls nationwide, filed for Chapter 11 bankruptcy late Sunday citing pandemic hardships.
The Columbus, Ohio-based company issued a press release saying it had secured $ 100 million in debtor financing to continue funding while it restructures the debt it incurred amid the COVID 19 pandemic both pedestrian traffic and revenue for shopping malls, the Chicago, Tribune reported.
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In particular, the company is trying to reduce an estimated $ 1 billion in debt, mainly due to temporary shopping mall closings and easing rental requirements for some tenants, CNN Business reported.
Customers in Washington Prime Group properties should expect business as usual throughout the process, the company said.
According to the mall owner’s website, the Washington Prime Group’s 100 locations are heavily concentrated in the Midwest, along the east coast and in Florida, the Tribune reported.
The company said it has entered into agreements with creditors who own 73% of the company’s secured debt, and the restructuring will allow the mall owner to “strengthen its business and operations in the future.”
“During the financial restructuring, we will continue to work to maximize the value of our assets and operating infrastructure,” said CEO Lou Conforti in the press release. “The company assumes that operations will continue as normal for the benefit of our guests, tenants, salespeople, interest groups and colleagues.”
According to the company, Washington Prime Group’s rental income fell about 20% from $ 633.6 million in 2019 to $ 506.7 million in 2020, the Tribune reported.
“The bankruptcy shows that while things are now back to normal, many of the scars left by the pandemic have not completely healed,” Neil Saunders, retail analyst and chief executive officer at GlobalData, told CNN Business.
“It takes strong balance sheets and solid operations to lead real estate companies through this period. Washington Prime didn’t have that foundation, so it turned to Chapter 11 to restructure and settle its debt, ”Saunders added.
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