Neiman Marcus nears deal on bankruptcy

Bloomberg

Neiman Marcus Group Inc is closing in on a deal with lenders led by Pacific Investment Management Co that would slash the department-store chain’s debt load by more than half in exchange for control of the company, according to people with knowledge of the matter.
The plan would be part of a bankruptcy court filing that could come as soon as this week, the people said. Lenders including Pimco, Davidson Kempner Capital Management and Sixth Street Partners would provide the company with more than $600 million to stay in business during the court process, said the people,
who asked not to be identified because the discussions are
private. Those lenders and others would swap their debt
for equity in the reorganised company.
Representatives for Neiman Marcus, Pimco, Davidson Kempner and Sixth Street declined to comment.
Neiman has struggled for years to find its footing as traffic fell at malls and department stores. The Dallas-based company reached a deal with creditors last year that bought it time for a turnaround. But with its stores shuttered since March by the Covid-19 pandemic, efforts to cut its more than $4.3 billion of debt took on a new level of urgency.
The retailer had been considering a competing financing proposal from a second group of creditors including Mudrick Capital Management that would provide the retailer with $700 million of capital, people with knowledge of the talks said. The proposal was contingent on the company pursuing an outright sale in bankruptcy, rather than a debt restructuring. Neiman rejected that plan, the people said.
Neiman, which is owned by Ares Management Corp and the Canada Pension Plan Investment Board, is among a number of retailers with heavy debt loads that are now threatening to be toppled by the pandemic.
Neiman Marcus intends to maintain most of its stores through the restructuring. Some could later be closed after additional reviews of their performance, they said.