CBL Properties Commences Voluntary Bankruptcy Proceedings to Execute Noteholder Supported Plan to Significantly Strengthen Fi...
November 02 2020 - 6:00AM
Business Wire
CBL Properties (NYSE:CBL) today announced that CBL &
Associates Properties, Inc., CBL & Associates Limited
Partnership (the “Operating Partnership”), and certain other
related entities have filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Southern District of Texas, in Houston, TX (the
“Court”) in order to implement a plan to recapitalize the company,
including restructuring portions of its debt. Through this process,
all day-to-day operations and business of the Company’s wholly
owned, joint venture and third-party managed shopping centers will
continue as normal. CBL’s customers, tenants and partners can
expect business as usual at all of CBL’s owned and managed
properties.
The Company intends to use the Chapter 11 process to implement
terms outlined in the Restructuring Support Agreement (the “RSA”)
that it entered into on August 18, 2020, with certain beneficial
owners and/or investment advisors or managers of discretionary
funds, accounts, or other entities (the “noteholders”) representing
in excess of 62% (including joinders) of the aggregate principal
amount of the Operating Partnership’s 5.25% senior unsecured notes
due 2023 (the “2023 Notes”), the Operating Partnership’s 4.60%
senior unsecured notes due 2024 (the “2024 Notes”) and the
Operating Partnership’s 5.95% senior unsecured notes due 2026 (the
“2026 Notes” and together with the 2023 Notes and the 2024 Notes,
the “Unsecured Notes”).
The RSA contemplates agreed-upon terms of a pre-arranged
comprehensive restructuring of the Company’s balance sheet (the
“Plan”). The Plan will provide the Company with a significantly
stronger balance sheet by reducing total debt and preferred
obligations by approximately $1.5 billion, extending debt
maturities and increasing liquidity while maintaining operational
consistency.
“After months of discussions and consideration of a number of
alternatives, CBL’s management and the Board of Directors firmly
believe that implementing the comprehensive restructuring as
outlined in the RSA through a Chapter 11 voluntary bankruptcy
filing will provide CBL with the best plan to emerge as a stronger
and more stable company,” said Stephen D. Lebovitz, Chief Executive
Officer of CBL. “With an aggregate of approximately $1.5 billion in
unsecured debt and preferred obligations eliminated and a
significant increase to net cash flow, upon emergence, CBL will be
in a better position to execute on our strategies and move forward
as a stable and profitable business.”
Lebovitz added, “We have continued negotiations with the lenders
under our secured credit facility since the signing of the RSA and
expect further discussions in an effort to reach a tri-party
consensual agreement between the Company, noteholders and credit
facility lenders during the bankruptcy process.”
As of September 30, 2020, CBL had approximately $258.3 million
in unrestricted cash on hand and available-for-sale securities. The
Company’s cash position, combined with the positive cash flow
generated by ongoing operations, is expected to be sufficient to
meet CBL’s operational and restructuring needs.
The Company has filed various customary motions with the Court
seeking several types of relief to allow CBL to meet necessary
obligations and fulfill its duties during the restructuring
process, including authority to continue payment of employee wages
and benefits, honor certain customer and vendor commitments and
otherwise manage its day-to-day operations as usual.
Certain subsidiaries, including CBL’s joint ventures and the
majority of CBL’s special purpose entities holding properties that
secure mortgage loans, were not included as part of the in-court
process. Subject to Court approval, CBL anticipates continuing to
meet all debt service and other obligations, as required, under its
property level secured loans and joint venture partnerships.
The latest information on CBL’s restructuring, including news
and frequently asked questions, can be found at
cblproperties.com/restructuring.
Weil, Gotshal & Manges LLP is serving as legal counsel to
the Company and Moelis & Company is serving as restructuring
advisor.
No Solicitation or Offer
Any new securities to be issued pursuant to the restructuring
transactions may not be registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities
laws but may be issued pursuant to an exemption from such
registration provided in the U.S. bankruptcy code. Such new
securities may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and any applicable state
securities laws. This press release does not constitute an offer to
sell or buy, nor the solicitation of an offer to sell or buy, any
securities referred to herein, nor is this press release a
solicitation of consents to or votes to accept any Chapter 11 plan.
Any solicitation or offer will only be made pursuant to a
confidential offering memorandum and disclosure statement and only
to such persons and in such jurisdictions as is permitted under
applicable law.
About CBL Properties
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of market-dominant properties located
in dynamic and growing communities. CBL’s portfolio is comprised of
107 properties totaling 66.7 million square feet across 26 states,
including 65 high-quality enclosed, outlet and open-air retail
centers and 8 properties managed for third parties. CBL seeks to
continuously strengthen its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information, visit cblproperties.com.
Information included herein contains “forward-looking
statements” within the meaning of the federal securities laws. Such
statements are inherently subject to risks and uncertainties, many
of which cannot be predicted with accuracy and some of which might
not even be anticipated. Future events and actual events, financial
and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. The reader is directed
to the Company’s various filings with the Securities and Exchange
Commission, including without limitation the Company’s Annual
Report on Form 10-K and the “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” included therein,
for a discussion of such risks and uncertainties.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201102005425/en/
Investor Contact: Katie Reinsmidt, Executive Vice President
& Chief Investment Officer, 423.490.8301,
Katie.Reinsmidt@cblproperties.com Media Contact: Stacey Keating,
Senior Director – Public Relations & Corporate Communications,
423.490.8361, Stacey.Keating@cblproperties.com
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