J.C. Penney Co. Explores Bankruptcy
Posted on 04/15/2020
Plano, Texas-based J.C. Penney Co. (JCP) is a major U.S. retailer. The 118-year old retailer is exploring filing for bankruptcy protection. This was after the Wuhan coronavirus pandemic forced the company to temporarily close its 850 department stores. JCP had to furlough some of its approximate 85,000 employees. After a decade of falling foot traffic and sales, JCP was already in hot water with struggling finances before the viral outbreak.
JCP has looming debt payments with roughly a US$ 12 million payment due on April 15, 2020 and this is followed by a US$ 105 million bond repayment due in June 2020. On April 15, 2020, JCP did not make its scheduled US$ 12 million payment on its 2036 bond. JCP has a 30-day grace period under the bond contract before the nonpayment becomes an event of default.
In March 2020, JCP drew down US$ 1.25 billion from its revolving credit line.
