WestShore Plaza owner Washington Prime files for bankruptcy reorganization, secures $100M in financing
By Mark Somerson &Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published:

Washington Prime Group, the owner of Tampa's WestShore Plaza, has filed for Chapter 11 bankruptcy protection.

Columbus, Ohio-based Washington Prime, which owns 100 malls, is in forbearance on an interest payment that was due Feb. 15. Enclosed shopping malls were among the commercial properties hit hardest by the novel coronavirus pandemic as consumers favored open-air centers. In some states, malls and nonessential retail were shuttered for months by state order.

The company says it has secured $100 million in new debtor-in-possession financing from creditors led by SVPGlobal to support day-to-day operations during the process and "ensure that all business operations continue in the ordinary course without interruption."

Washington Prime filed in the U.S. Bankruptcy Court for the Southern District of Texas.

“The company’s financial restructuring will enable WPG to right-size its balance sheet and position the company for success going forward," CEO Lou Conforti said in a release. "During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”

Washington Prime has an ambitious redevelopment plan for WestShore Plaza, which sits at one of Tampa's busiest corners: the intersection of Kennedy and Westshore boulevards. The redevelopment, which would demolish the mall's vacant Sears box and add residential units, office space, a grocery store and more to that corner of the property, has received full city council approval.

A construction timeline for the redevelopment has never been revealed. In May 2020, a spokeswoman for Washington Prime told the Tampa Bay Business Journal that the redevelopment was still in the works.

In March, Washington Prime reported a $262 million net loss in 2020, including a $111.4 million net loss in the fourth quarter alone. The company had $3.2 billion in debt overall as of the end of 2020, according to its most recent annual report.

The restructuring agreement provides for a deleveraging of the company’s balance sheet by nearly $950 million through the division of unsecured notes and a $190 million paydown of the company’s revolving credit and term loan facilities. The restructuring includes a $325 million equity rights offering to pay down debt. And it provides a four-year extension of the remaining credit facility debt, payment in full of all claims held by vendors and service providers, and a baseline recovery for equity holders of $40 million in cash or 6.125% of new equity.