U.S based chain of luxury department stores Neiman Marcus Group Inc. (NMG) is looking forward to file for bankruptcy this week according to sources with direct information of the matter.
When this happens, Neiman Marcus will become the first American department store operator to go down during this tough economic times brought about by the global coronavirus pandemic.
Heavily sinking in debts, Neiman Marcus has few or no other options left, following breakout of coronavirus things for the company have been rapidly moving from bad to worse. Since breakout of deadly pandemic the company has shut down 43 of its stores.
The sources additionally revealed, the company is almost finalizing negotiations with its lenders to secure a loan amounting to hundreds of millions of dollars. The cash is set to facilitate the company’s operations during the time it will be under bankruptcy.
Citing data from credit ratings firm Standard & Poor, Neiman Marcus debt stands at around $4.8 billion.
A good portion of the debt is part of a $6 billion leveraged buyout by owners of the company back in 2013. The remaining debt is owed to Pension Plan Investment Board (CPPIB) and private equity firm Ares Management Corp.
Over the recent years Neiman has been doing everything under its control to avoid a bankruptcy situation at all costs, last year the company prolonged its dates for meeting its financial obligations in a restructuring deal with some creditors.
The sources also disclosed the company skipped to pay debts totaling to millions of dollars last week, among the debts skipped included one which had given the company a few day to settle the debt so as to avoid default.