- Term loan lenders holding greater than 70.0%
of the outstanding principal amount under our term loan facility
and shareholders holding a majority of the equity of the company
support the financial restructuring transaction
- The company is working actively with the term
loan lenders to obtain the necessary consents to implement the
transaction
- All non-compliance with the terms of the
company’s credit facilities would be waived in connection with the
transaction
- Transaction would provide the company with
additional liquidity
- J.Jill plans to meet its obligations to its
vendors in full
J.Jill, Inc. (NYSE JILL) (“the Company”), today announced that
with the support of a majority of the Company’s shareholders, it
has entered into a Transaction Support Agreement (“TSA”) with
lenders holding greater than 70.0% of the Company’s term loans
(“Consenting Lenders”) on the principal terms of a financial
restructuring (“Transaction”) that would result in a waiver of any
past non-compliance with the terms of the Company’s credit
facilities and provide the company with additional liquidity.
If the Transaction is consented to by the requisite term loan
lenders, the Transaction will be consummated on an out-of-court
basis. The out-of-court Transaction would extend the maturity of
certain participating debt by 2 years, through May 2024, enabling
the Company to strengthen its balance sheet and better position
itself for long-term growth. The Company is working actively with
the Consenting Lenders to obtain the necessary consents.
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 United States Code (the
“In-Court Transaction”) the key terms of which have been
negotiated, including additional financing during the Chapter 11
process. While the Company hopes to receive the required consents
to execute the out-of-court Transaction, the Company anticipates
that the In-Court Transaction would be a swift process in which all
vendor claims would be unimpaired and paid in full, and from which
the Company would emerge with a strong and healthy balance
sheet.
“J.Jill has been buoyed by a strong direct business and a loyal
customer base, and the transaction proposed in this agreement will
enable our company to emerge from this challenging stretch in a
position of strength,” said Jim Scully, Interim Chief Executive
Officer of J.Jill. “I am grateful for the confidence and support of
many of our lenders and shareholders as we work together to advance
the best interests of our employees, vendors and customers and
position our company for long-term success.”
Key Terms
The out-of-court Transaction contemplated by the TSA will, among
other things:
- extend the maturity of certain participating debt to May
2024,
- waive all existing non-compliance with the terms of the
Company’s credit facilities,
- grant a financial covenant holiday until Q4 2021, and
- provide for a new money investment of no less than $15mm in the
form of a junior term loan facility.
If the Transaction does not receive the required consents for
the out-of-court Transaction (or the Company does not meet the
other conditions to closing the out-of-court Transaction), the TSA
provides that the Company will pivot to the In-Court Transaction,
which will, among other things, provide for:
- a new money investment of up to $75mm in the form of a
debtor-in-possession facility, and
- the conversion of the debtor-in-possession facility into a new
term loan facility that matures 5 years after emergence.
Conditions to Closing
The closing of the out-of-court Transaction is conditioned on
the satisfaction or waiver of certain conditions precedent,
including finalizing all definitive documents and achieving certain
participation thresholds. Specifically, the Transaction requires
participation by lenders holding at least 95% of the outstanding
principal amount of the Company’s term loans by September 11, 2020
(as such date and consent threshold may be modified as provided in
the TSA).
Additional information regarding the TSA, including certain
conditions to the consummation of the TSA, will be disclosed in a
Current Report on Form 8-K to be filed with the Securities and
Exchange Commission and available on www.sec.gov.
Kirkland & Ellis LLP is serving as legal counsel to the
Company, Centerview Partners is serving as the Company’s financial
advisor and investment banker, and AlixPartners is serving as the
Company’s restructuring advisor.
About J.Jill
J.Jill is a premier omnichannel retailer and nationally
recognized women’s apparel brand committed to delighting customers
with great wear-now product. The brand represents an easy,
thoughtful and inspired style that reflects the confidence of
remarkable women who live life with joy, passion and purpose.
J.Jill offers a guiding customer experience through more than 280
stores nationwide and a robust e-commerce platform. J.Jill is
headquartered outside Boston. For more information, please visit
www.jjill.com or http://investors.jjill.com.
Forward Looking Statements
This press release contains, and oral statements made from time
to time by our representatives may contain, “forward-looking
statements.” Forward-looking statements include those identified by
words such as “could,” “may,” “might,” “will,” “likely,”
“anticipates,” “intends,” “plans,” “outlook,” “seeks,” “believes,”
“estimates,” “expects,” “continues,” “projects” and similar
references to future periods, or by the inclusion of forecasts or
projections. Forward-looking statements are based on our current
expectations and assumptions regarding capital market conditions,
our business, the economy and other future conditions. Because
forward-looking statements relate to the future, by their nature,
they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. As a result, our
actual results may differ materially from those contemplated by the
forward-looking statements. Important factors that could cause
actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the
Company’s ability to consummate the Transaction, on the terms
proposed or at all, including the Company’s ability to obtain
requisite support of the Transaction from various stakeholders and
to finalize the terms and documentation relating to the
Transaction; the Company’s ability to comply with the terms of the
TSA, including completing various stages of the restructuring
within the dates specified by the TSA; the effects of disruption
from the proposed financial restructuring making it more difficult
to maintain business, financing and operational relationships; the
Company’s ability to achieve the potential benefits of the proposed
financial restructuring; the impact of the COVID-19 epidemic and
political unrest on the Company and the economy as a whole; the
Company’s ability to adequately and effectively negotiate a
long-term solution under its outstanding debt instruments; risks
related to the forbearance agreements with the Company’s lenders,
including the duration of such agreements and the Company’s ability
to meet its ongoing obligations under such agreements; the
Company’s ability to take actions that are sufficient to eliminate
the substantial doubt about its ability to continue as a going
concern; the Company’s ability to develop a plan to regain
compliance with the continued listing criteria of the NYSE; the
NYSE’s acceptance of such plan; the Company’s ability to execute
such plan and to continue to comply with applicable listing
standards within the available cure period; risks arising from the
potential suspension of trading of the Company’s common stock on
the NYSE; regional, national or global political, economic,
business, competitive, market and regulatory conditions, including
risks regarding our ability to manage inventory or anticipate
consumer demand; changes in consumer confidence and spending; our
competitive environment; our failure to open new profitable stores
or successfully enter new markets and other factors set forth under
“Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended February 1, 2020. Any forward-looking statement made in
this press release speaks only as of the date on which it is made.
J.Jill undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200901005460/en/
Investor Contact: Caitlin Churchill ICR,
Inc. investors@jjill.com 203-682-8200 Media
Contact: Jessica Liddell ICR, Inc.
jjillPR@icrinc.com 203-682-8200
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