US retail giant JC Penney has responded to reports the company has hired advisers to explore debt restructuring options, noting it has a “strong liquidity position” and is not preparing for a restructuring or bankruptcy.
In a statement, the retailer notes that as a public company it routinely hires external advisors to evaluate opportunities and is taking positive and proactive measures, as it has done in the past, to improve its capital structure and the long-term health of its balance sheet.
The announcement comes in light of reports last week that claimed JC Penney has recently held talks with lawyers and investment bankers who advise on debt restructurings and other financial workouts.
A report published by Reuters said the retailer, which widened its net loss to US$154m in the first quarter to 4 May, is exploring options that could include raising additional cash or negotiating with creditors to push out debt maturities.
“The discussions with restructuring specialists reflect JC Penney’s resolve to take steps in coming months to increase its financial breathing room and avoid confronting a potential bankruptcy filing down the road,” Reuters cited its source as saying.
However, in its statement JC Penney says it has no significant debt maturities coming due in the near term, noting it continues to maintain a strong liquidity position.
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By GlobalData“Also, given our strong liquidity position we can confirm that we have not hired any advisors to prepare for an in-court restructuring or bankruptcy.”
Earlier this year, JC Penney said it would shutter 18 full-line stores this summer ahead of an ongoing turnaround that includes plans to ditch products like major appliances and focusing more on higher-margin products such as apparel.
