J. Jill (NYSE:JILL) stock is rocketing higher on Tuesday after releasing an update for its ongoing bankruptcy.
The retailer of women’s fashion says that a group representing 70% of its loan holders has agreed to support its efforts for a restructuring. To go along with this, the company is seeking an extended forbearance on its loans to May 2024.
J. Jill notes in its bankruptcy update that it needs approval from loan holders before it can move forward with this plan. If it gets approval, it will make it easier for the company to go through the restructuring process with additional funding from lenders.J. Jill points out that this new funding will include no less than $15 million from a junior term loan facility.
Another benefit of the agreement is J. Jill not suffering from any non-compliance with its credit facilities. That’s because those facilities would waive the non-compliance as part of the agreement.
So what does J. Jill have to do for this bankruptcy update to go through? The company needs approval from 95% of loan holders before the agreement can close. The current agreement is an out-of-court one. If it doesn’t work out, the company will move toward the in-court agreement, which includes $75 million in the form of a debtor-in-possession facility.
J. Jill has until Sept. 11 to close the deal with its loan holders.
JILL stock was up 49.5% as of Tuesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
