CHATTANOOGA, TENN. — CBL Properties, a Chattanooga-based mall owner that declared for Chapter 11 bankruptcy in November, has reached an agreement with its credit facility lenders and unsecured note holders that would eliminate a significant amount of debt, pending bankruptcy court approval. The amended restructuring support agreement (RSA) provides for the elimination of more than $1.6 billion of debt and preferred obligations, as well as a reduction in interest expense.
In exchange for their approximately $1.4 billion in principal amount of unsecured notes and $133 million in principal amount of the secured credit facility, noteholders will receive in aggregate $95 million in cash, $555 million of new senior secured notes (of which up to $100 million may be received in the form of new convertible secured notes) and 89 percent in common equity of the newly reorganized company. Existing common and preferred stakeholders in CBL Properties are expected to receive up to 11 percent of common equity in the newly reorganized company.
“This agreement is a major step forward for CBL’s restructuring plan,” says Stephen Lebovitz, CEO of CBL Properties. “The plan we are announcing today achieves all of the major objectives we have set for CBL post-emergence, including greater financial flexibility with a significantly deleveraged balance sheet, a lengthened maturity schedule and overall lower interest expense. We are confident that the restructured company will be in an excellent position to execute on our strategies and return to growth.”
No timeline was given for the bankruptcy court approval process. CBL Properties owns and manages 105 properties totaling 64.6 million square feet across 24 states, including 64 enclosed, outlet and open-air malls and shopping centers. CBL’s common stock previously traded on the New York Stock Exchange but in November 2020 the exchange delisted the REIT. The company now trades over-the-counter (OTC) under the symbol “CBLAQ.”