J.C. Penney News: JCP Stock Rockets 8% on $450 Million Potential Financing

J.C. Penney (NYSE:JCP) might be getting some positive news if reports about funding are true.

J.C. Penney News: JCP Stock Rockets 8% on $450 Million Potential Financing

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According to these recent news reports, J.C. Penney is currently working out a deal with first-lien lenders that would allow the company to continue operating its business through bankruptcy. The deal could have lenders supplying it with as much as $450 million in funding.

Reports of this deal come from anonymous sources close to the matter. They claim that the deal would grant J.C. Penney $225 million to use instantly. However, the struggling retailer would have to meet certain goals before it gets the other $225 million.

The finer details of the deal will come to light if lenders agree to fund it. Even so, there are some details in the news reports. Included in those are plans for the retail company to close down between 180 to 200 stores.

Russell Mills, a Bell Nunnally bankruptcy attorney, said the following to CNBC.

“Even if companies were to open their stores tomorrow – there’s probably some parts of the economy that will never be the same. In bankruptcy, you have to be able to forecast your revenues over a period of time – how can any debtor forecast with any certainty what their revenue is going to be for three to five years.”

J.C. Penny has yet to release an earnings report for its fiscal first quarter of 2020, which starts in March. Due to that, investors have yet to see the full effects that the novel coronavirus has had on the company. With stores being closed, it’s unlikely it’s doing well.

JCP stock was up 8.4% as of Wednesday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/05/jc-penney-funding-news-boosts-stock/.

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