“The restructuring and recapitalisation of Edcon has passed its next hurdle,” the company’s CEO, Grant Pattison said in a statement today.
“The Edcon Board has approved the structure of the proposed recapitalisation plan, and in response lenders have extended waivers to allow time for implementation. This will allow sufficient time for the number of necessary due diligence and governance processes to be completed.”
Pattison added that at this stage, additional detail couldn’t be released as there were confidentiality agreements in place.
“The Board fully appreciates the support that is being received from all Group stakeholders and the commitment that has been shown. We will make further announcements in due course.”
The Sunday Times reported in its latest edition that the retailer was in discussions with the owners of shopping malls about a two-year 41% reduction in exchange for a small stake in the company.
Edcon, for several years, has had an over-leveraged capital structure, following difficulties in its credit business in 2014. The economic slowdown and softer consumer spending compounded this issue.
The company was bought by Bain Capital around ten years ago. Bain, however, relinquished equity control to creditors last year that include Franklin Templeton, Standard Bank and Absa.
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