Washington Prime Misses Loan Payment, Negotiating Possible Chapter 11

YOUNGSTOWN, Ohio – Washington Prime Group Inc., owner of the Southern Park Mall, reported Tuesday “that there exists substantial doubt about the company’s ability to continue as a going concern as defined by generally accepted accounting principles.

In reporting its fourth-quarter financial results, the Columbus-based operator of shopping centers, said it lost $111.4 million in the fourth quarter and would default on a $23.2 million interest payment due today to the senior note holders of related entity WPG LP.

Washington Prime said it has entered into forbearance agreements with its creditors that expire March 31. That gives the company time to continue “to restructure its capital structure,” the filing stated.

The company acknowledged that it may need to restructure through Chapter 11 bankruptcy reorganization.

“Although the company continues to be open to all discussions with the holders of the notes and its other stakeholders regarding a potential restructuring, there can be no assurance the company will reach an agreement regarding a restructuring in a timely manner, on terms that are attractive to the company, or at all,” Washington Prime said Tuesday. “The company expects to continue to provide quality service to its customers without interruption and work with its business partners as usual during the course of these discussions and any potential transaction.”

The $111.4 million net loss in the fourth quarter compares to net income of $17.1 million in the fourth quarter of 2019, according to the report.

“The year-over-year difference relates primarily to the significant impacts of tenant lease modifications and increased bad debt expense related to delinquent receivables during the fourth quarter of 2020 due to the ongoing COVID-19 pandemic,” the company said.

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