Neiman Marcus reorg plan approved; to exit Chapter 11 by end of September

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Neiman Marcus reorg plan approved; to exit Chapter 11 by end of September

By Marianne Wilson - 09/08/2020

Neiman Marcus Group has received court approval of its Chapter 11 reorganization plan.

The green light clears the way for the luxury retailer’s emergence from Chapter 11 bankruptcy proceedings with a reduced debt load and “significant” new funding in a strengthened capital structure. The plan will eliminate more than $4 billion of Neiman’s nearly $5.5 billion in existing debt and $200 million in interest expense while leaving no near-term maturities.

Neiman filed for bankruptcy in May. With the plan confirmed, the company said it intends to emerge from bankruptcy by Sept. 30, once all conditions have been finalized, with the full support of its creditors and new equity shareholders.

"This is an important milestone in our Chapter 11 process and an exciting day for the future of our company, as it sets the stage for our emergence,” said Geoffroy van Raemdonck, chairman and CEO, Neiman Marcus Group. “Throughout this process, I've been so impressed by the commitment of our associates, who continue to extend passion and love for our customers. I'm also grateful to our brand partners for standing with us and believing in our business.”

van Raemdonck continued: "Even in a continually evolving retail environment, we continue to succeed and exceed our budget. NMG is positioned to win thanks to our differentiated and deep customer-associate relationships, the mutual trust of our lenders and brand partners, and our accelerated digital transformation." 

Certain institutional investors will fund a $750 million exit financing package that would fully refinance the DIP and provide significant additional liquidity for the business. The exit term loan financing is in addition to the liquidity provided by the $900 million ABL led by Bank of America and a consortium of commercial banks.

“With the exit financing and existing ABL, the company has the strategic capital available to support its business and transformation initiatives through emergence and beyond,” Neiman stated in a release.
 

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