Charlotte Russe in debt restructuring agreement
Charlotte Russe has been given some breathing room.
The young women's apparel retailer has entered into a debt restructuring agreement that will reduce the chain's long-term debt from approximately $14 million to $90 million. The agreement also will reduce loan interest rates and extend the loan's maturity date three years to 2022.
"We are very pleased to be taking this important step, which puts us on a clear path to reducing our long-term debt, improving our financial flexibility, reinvigorating the Charlotte Russe brand and positioning the company for success,” said Jenny Ming, CEO of Charlotte Russe, which operates 545 Charlotte Russe stores throughout 45 states and Puerto Rico. “The willingness of our lenders to equitize a substantial portion of the term loan debt underscores their confidence in the Charlotte Russe team and their commitment to our strategic plan for profitability and future growth."
In exchange for the debt relief, the lenders will receive 100% equity in Charlotte Russe. The agreement also stipulates that brand has to obtain a threshold of annualized operational savings, including rent relief.