The owner of the Plymouth Meeting Mall, PREIT, announced on October 15th that it has reached an agreement with more than 80% of its bank lenders under which the banks would provide an additional $150 million to recapitalize the business and extend its debt maturity schedule, supporting PREIT’s operations and the continued execution of its strategic priorities. Under the terms of the agreement, PREIT would have access to $150 million in new capital to strengthen the business and provide financial flexibility.
“Long before the COVID-19 pandemic hit, we began taking meaningful actions to enhance the financial and operational health of the business,” said Joseph F. Coradino, CEO of PREIT. “These steps have included proactive asset sales, anchor repositioning and redevelopment to significantly minimize our exposure to underperforming assets, as well as, diversifying our tenant base to provide mass-market offerings appealing to shoppers while simultaneously improving the Company’s underlying tenant credit profile. The next phase in our evolution is continuing on the path we have charted to create diverse multi-use ecosystems at our properties marked by a healthy mix of multifamily housing, healthcare services, fulfillment centers, and other uses alongside our robust retail, dining and entertainment lineups. We appreciate the support of our bank lending group, and their collective confidence in our portfolio and the progress we are making in positioning PREIT for long-term success. This agreement provides us with the liquidity to compete effectively, meet our obligations, and continue providing our tenants, customers and communities with the high-quality shopping experience they expect at our properties.”
In the announcement, PREIT also shared:
If the Company is unable to secure the support of the remaining lenders holding less than 20% of the debt, it may need to complete this restructuring through a prepackaged reorganization under Chapter 11 of the United States Bankruptcy Code. The purpose of such a process, if necessary, would be to implement the agreement that already has the support of over 80% of the Company’s bank lenders. As such, the Company expects that any prepackaged reorganization process would be expedited, and that it would have no impact on shareholders, suppliers and other trade creditors, business partners, or other stakeholders, all of whom would be unimpaired. The Company will continue operating as normal with a primary focus on the health and safety of its employees, partners, customers and communities.
Coradino concluded, “Given the significant support we have already received from a substantial majority of our lenders, we are confident in our ability to implement the recapitalization agreement quickly and efficiently. We appreciate the support of our bank lenders, tenants, and customers, and above all, we are grateful for the continued dedication of our relentless team of associates at PREIT. We are excited to take another big step forward in positioning PREIT for an even more successful future.”
Coradino mentioned a diversification plan that involves the addition of multi-family housing for its properties and that includes the Plymouth Meeting Mall. PREIT is seeking to construct an apartment building on the property and there is an upcoming zoning hearing (we are working on getting the specifics).