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Anonymous ID: 2bbf9e May 15, 2020, 7:24 a.m. No.9183571   🗄️.is đź”—kun

JC Penney Makes $17 Million Interest Payment-stock halted

 

Update (1011ET): Despite expectations of an imminent filing, JC Penney announced Friday morning that it had made a $17 million interest payment that was due on May 7. JCP had entered the "grace period" after missing the payment. During that time, it "evaluated strategic alternatives" and, apparently, ultimately decided to buy itself more time.

 

Here's the key quote from the filing:

 

On May 14, 2020, J. C. Penney Company, Inc. and J. C. Penney Corporation, Inc. (“JCP” and, together with J. C. Penney Company, Inc., the “Company”) made the approximately $17 million interest payment (the “Interest Payment”) that was due and payable on May 7, 2020 with respect to JCP’s senior secured term loan credit facility (the “Term Loan Facility”). Under the credit and guaranty agreement governing the Term Loan Facility, the Company had a grace period of five business days to make the Interest Payment before such non-payment would constitute an “event of default” thereunder. The Company had entered into such grace period in order to evaluate certain strategic alternatives, none of which have been implemented at this time and which continue to be considered.

 

Why would the company make this payment if its planning on filing for bankruptcy protection in the coming days? It just doesn't make sense…unless…

 

..*

 

JC Penney shares have been halted Friday morning just minutes after the open as the company is widely expected to file for Chapter 11 bankruptcy protection.

 

*JC PENNEY IS HALTED FOR NEWS PENDING

 

<plays taps>

— Tom Flatten The Curve Hearden (@followtheh) May 15, 2020

 

We have been closely following the trials and tribulations of JCP, Neiman Marcus and other retailers who have filed for bankruptcy or are expected to soon file, as the coronavirus outbreak delivers the final blow toppling over the house of cards of junk corporate debt that has weighted down these businesses. Last night, NBC News, CNN and others reported that JCP's filing was expected during the next day or so.

 

In anticipation of the filing, the New York Times published a story last night (appearing in Friday's paper) highlighting one of our favorite themes: the role of Private Equity in bringing these retail giants to their knees by loading them down with debt and siphoning off money that could have been reinvested. JC Penney and its peers have been widely criticzed for failing to invest in their online platform, and developing more coordinated sales strategies allowing consumers to blend e-commerce with brick-and-mortar. Some of JC Penney's most liquid bonds were trading at roughly 6 cents on the dollar Friday morning. However, as we reported a week ago, JCP has already struck a deal for another $500 million in financing to get it through bankruptcy. While that loan might be necessary to save the business and prevent a liquidation, we would ordinarily caution against using debt to solve a debt problem.

 

So far, evidence suggests that JCP's management is still treating the company like a cash cow, as an SEC filing filed over the weekend revealed the company handed out big bonuses to execs while placing thousands of hourly workers on furlough. Of course, while many might be tempted to lash out at the company, these types of management-retention bonuses are standard practice during bankruptcy. They're known as KERP - Key Employee Retention Packages - and virtually ensure that every politician and crusading journalist can bash big business every time a company files for Chapter 11 protection.

https://www.zerohedge.com/markets/jc-penney-shares-halted-bankruptcy-filing-looms

 

this is just buying time. Ackman (Pershing Square) fucked them years ago trying to use the properties it owned as a leveraged play.

Anonymous ID: 2bbf9e May 15, 2020, 8:05 a.m. No.9183984   🗄️.is đź”—kun

Fiat Chrysler in talks over 6.3 billion euro state-guaranteed loan

 

Fiat Chrysler is in talks with Italian lender Intesa Sanpaolo over a 6.3 billion euro ($6.8 billion) state-guaranteed loan to help the automaker weather the coronavirus crisis, a source close to the matter said on Friday.

 

The loan, which is part of emergency liquidity measures the government is making available to the country’s businesses, must be approved by Intesa Sanpaolo’s board, the source said. Once approved by the lender, the request will be reviewed by Italy’s export credit agency SACE, through which the state provides its guarantee, and then by the Treasury for a final green light, the source added.

 

FCA and Intesa Sanpaolo declined to comment.

 

News that FCA was exploring a state-backed loan was first reported by MF daily on Friday.

https://www.reuters.com/article/us-health-coronavirus-fca-intesa/fiat-chrysler-in-talks-over-6-3-billion-euro-state-guaranteed-loan-source-idUSKBN22R2AP