Pre-Negotiated, Expedited Restructuring
Expected to Substantially Reduce Debt and Optimize
Liquidity
Party City Stores Open, Serving Customers as
the "Go To" One-Stop-Shop for All Things Celebration
$150 Million
Financing Commitment to Support Ongoing Operations Across All
Divisions
WOODCLIFF LAKE, N.J., Jan. 17,
2023 /PRNewswire/ -- Party City Holdco Inc. (NYSE:
PRTY) ("PCHI" or the "Company"), a global leader in the
celebrations industry, today announced that it has entered into an
agreement with an ad hoc group of holders of more than 70% of the
Company's senior secured first lien notes (the "Ad Hoc Group") to
support an expedited restructuring that would substantially reduce
PCHI's debt and optimize its capital structure and liquidity. This
would ensure that PCHI is best equipped to continue to advance its
transformational initiatives and enhance its market leadership in
all things celebration from a strengthened financial position.
To implement the Company's pre-negotiated restructuring, PCHI
and certain of its domestic subsidiaries filed voluntary Chapter 11
petitions for relief in the U.S. Bankruptcy Court for the Southern
District of Texas. The Company's
subsidiaries outside of the U.S., its Party City franchise stores,
and its Anagram business, which is the global market leader in foil
balloons, are not part of the Chapter 11 proceedings and will
continue as core components of the PCHI enterprise.
"In the face of pandemic headwinds, a global supply chain
crisis, and other macroeconomic challenges that have faced our
industry, we have made significant strides in PCHI's ongoing
transformation – establishing a solid foundation for long-term
growth and continued success as the market leader in the
celebrations space," said Brad
Weston, Chief Executive Officer of PCHI. "Today's action to
strengthen PCHI's balance sheet will bolster our ability to further
advance our strategic priorities and continue to innovate and
elevate the customer experience."
Mr. Weston added, "As we take this important step to put our
business on stronger financial footing for the future, we are as
committed as ever to inspiring joy by making it easy for our
customers to create unforgettable memories. We appreciate the
commitment of our team members and the continued support of our
partners as we further enhance our position as the 'go to'
one-stop-shop for celebrating life's special moments."
The Company continues to welcome shoppers at the more than 800
Party City stores and online at www.partycity.com. Retail and
wholesale customers across all of the Company's businesses and
brands can expect the same amazing product selection and service.
PCHI will continue to advance its key initiatives underway,
including the further conversion of Party City stores to
next-generation prototypes, evolving its Halloween City pop-up
stores to drive performance in this channel, building out a
best-in-class online shopping experience, establishing localized
marketplaces to revolutionize one-stop-shopping in the celebrations
space, and delivering more compelling assortments and innovation
for customers.
PCHI has secured a commitment from the Ad Hoc Group for
$150 million in debtor-in-possession
financing. Subject to Court approval, this "new money" financing
will provide ample liquidity to support continued operations during
the process across the Company's retail and consumer products
divisions while maintaining momentum on its transformation.
The Company is filing with the Court a series of customary
motions seeking to maintain business-as-usual operations and uphold
its commitments to its valued stakeholders. These "first day"
motions, which PCHI expects to be approved in short order, include
requests to continue to pay wages and provide benefits to the
Company's employees as usual as well as honor customer programs and
policies. The Company intends to pay suppliers in the ordinary
course for authorized goods received and services provided after
the filing.
The restructuring is expected to be completed in the second
quarter of 2023.
Additional Information
Court filings and other documents related to the Company's
financial restructuring are available at
https://cases.ra.kroll.com/PCHI. Suppliers with questions can call
a dedicated hotline at (888) 905-0493 (toll-free) or +1 (646)
440-4580 (international) or email
PCHIInquiries@ra.kroll.com.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as
legal counsel, Moelis & Company LLC is serving as investment
banker, AlixPartners, LLP is serving as financial advisor, and
A&G Realty Partners is serving as real estate advisor to the
Company.
Davis Polk & Wardwell LLP is
serving as legal counsel and Lazard is serving as investment banker
to the Ad Hoc Group.
About Party City Holdco Inc.
Party City Holdco Inc. (PCHI) is a global leader in the
celebrations industry, with its offerings spanning more than 70
countries around the world. PCHI is also the largest vertically
integrated designer, manufacturer, distributor, and retailer of
party goods in North America.
PCHI team members demonstrate a daily commitment to the
company's Brand Purpose: to inspire joy by making it easy for
customers to create unforgettable memories.
PCHI operates across multiple businesses within its Retail
Division and Consumer Products Division. On the retail side, Party
City (partycity.com) is the leading omnichannel retailer in the
celebrations category, operating more than 800 company-owned and
franchise stores as well as Halloween City (halloweencity.com)
seasonal pop-up stores. The Consumer Products Division includes
design and manufacturing entities Amscan, an industry leader in
celebration décor, tableware, costumes, and accessories, and
Anagram, the global market leader in foil balloons.
PCHI is headquartered in Woodcliff Lake, N.J. with
additional locations throughout the Americas and Asia.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Some of the forward-looking statements in this press release
can be identified by the use of forward-looking terms such as
"believes," "expects," "projects," "forecasts," "may," "will,"
"estimates," "should," "would," "anticipates," "plans" or other
comparable terms. Forward-looking statements speak only as of the
date they are made and, except for the Company's ongoing
obligations under the U.S. federal securities laws, the Company
does not undertake any obligation to publicly update any
forward-looking statement, whether to reflect actual results of
operations; changes in financial condition; changes in results of
operations and liquidity, changes in general U.S. or international
economic or industry conditions; changes in estimates, expectations
or assumptions; or other circumstances, conditions, developments or
events arising after the date of this press release. You should not
rely on forward-looking statements as predictions of future events.
The Company's actual results may differ materially from those
anticipated in these forward-looking statements as a result of
certain risks and other factors, which could include the following:
risks and uncertainties relating to the Chapter 11 cases, including
but not limited to, the Company's ability to obtain bankruptcy
court approval with respect to motions in the Chapter 11 cases, the
effects of the Chapter 11 cases on the Company and on the
interests of various constituents, bankruptcy court rulings in the
Chapter 11 cases and the outcome of the Chapter 11 cases in
general, the length of time the Company will operate under the
Chapter 11 cases, risks associated with any third-party motions in
the Chapter 11 cases, the potential adverse effects of the Chapter
11 cases on the Company's liquidity or results of operations and
increased legal and other professional costs necessary to execute
the Company's reorganization; finalization and receipt of the
debtor-in-possession facility, the conditions to which the
Company's debtor-in-possession facility is subject and the risk
that these conditions may not be satisfied for various reasons,
including for reasons outside of the Company's control; whether the
Company will emerge, in whole or in part, from Chapter 11 cases as
a going concern; the consequences of the acceleration of the
Company's debt obligations; trading price and volatility of the
Company's common stock, and the ability of the Company to remain
listed on the New York Stock Exchange, trading price and volatility
of the Company's indebtedness and other claims, as well as other
risk factors set forth in the Company's Annual Report on Form 10–K
and Quarterly Reports on Form 10–Q filed with the SEC. The Company
therefore cautions readers against relying on these forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on the Company's behalf are expressly
qualified in their entirety by the foregoing cautionary
statements.
Media Contact
Kekst CNC
Sherri L. Toub / Wendi Kopsick
PCHIMediaInquiries@kekstcnc.com
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SOURCE Party City Holdco Inc.
