
Bloomberg
Ascena Retail Group Inc, the struggling owner of the Ann Taylor and Lane Bryant clothing chains, is seeking $150 million of new capital from its lenders to fund operations during a bankruptcy reorganisation, according to people with knowledge of the plans.
The retailer is closing in on a restructuring plan that would also let creditors install new board members, the people said. The new money portion of the so-called debtor-in-possession loan may pay 2.5% interest and would be backed by existing lenders, they added, saying that plans are fluid and could change.
In addition to the fresh financing, the DIP loan will also include about $160 million of existing debt that will become exit financing when Ascena completes the in-court restructuring process, said the people. Mahwah, New Jersey-based Ascena didn’t immediately return messages seeking comment.
Ascena is looking to use the bankruptcy process to turn its roughly $1.2 billion existing term loan into a less than $100 million obligation, the people said. It will either pay down or exchange the remaining debt into equity in the reorganised company, the people said. Lenders who provide a portion of the new money are slated to get a 100% stake in the Ascena’s post-bankruptcy equity, while those who don’t may get less than 50%, they added.
Existing lenders Monarch
Alternative Capital and Bain Capital, who are among the largest and most active funds in the restructuring process, will each get to appoint a member to the company’s board, the people said. A representative for Monarch didn’t immediately respond to requests for comment.