Overview
- Saks Global plans to seek Chapter 11 protection imminently, possibly as soon as Tuesday, according to people familiar with the talks.
- Sources say the near-final plan includes a $1 billion debtor-in-possession loan led by Pentwater Capital and Bracebridge Capital, a $250 million asset-backed facility from banks, and $500 million available upon emergence.
- The financing would require bankruptcy court approval and could be adjusted, with lenders potentially converting some commitments to equity if the company successfully reorganizes.
- The cash infusion is intended to fund payroll, pay suppliers and restock depleted inventory so Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and Saks Off 5th can keep operating during the process.
- Complicating factors include Authentic’s 50% stake in a licensing entity for the brands, which could grow in bankruptcy, and uncertainty over how to leverage reported equity in the Fifth Avenue flagship.