US retailer J.Jill recently announced that it has entered into a transaction support agreement (TSA) with lenders holding greater than 70 per cent of its term loans on the principal terms of a financial restructuring that would result in a waiver of any past non-compliance with the terms of its credit facilities and provide the company with additional liquidity.

If the transaction is agreed to by the requisite term loan lenders, it will be consummated on an out-of-court basis, the company said in a press release.

The out-of-court transaction would extend the maturity of certain participating debt by two years till May 2024, enabling the company to strengthen its balance sheet and better position itself for long-term growth.

In the event that the transaction does not receive the required consents, the parties to the TSA have agreed to a prepackaged plan of reorganization under Chapter 11 of the US code the key terms of which have been negotiated, including additional financing during the Chapter 11 process.

The out-of-court Transaction contemplated by the TSA will, among other things, waive all existing non-compliance with the terms of the company’s credit facilities, grant a financial covenant holiday until the fourth quarter of 2021, and provide for a new money investment in the form of a junior term loan facility.

Fibre2Fashion News Desk (DS)

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