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Saks Global Faces Financial Crisis Amid Bankruptcy Fears
9 Jan
Summary
- Saks Global is seeking up to $1 billion in financing to avoid bankruptcy.
- Investors are hesitant due to skepticism about the company's reorganization prospects.
- The luxury chain missed an interest payment, increasing financial pressures.
Saks Global, a 159-year-old luxury department store chain, is reportedly struggling to secure as much as $1 billion in financing. This crucial funding is needed to sustain operations should the company proceed with a Chapter 11 bankruptcy filing. The retailer has been attempting to secure a debtor-in-possession loan, which would cover essential expenses like payroll and inventory during bankruptcy proceedings.
Despite the protections offered to DIP lenders, investor interest has been minimal. Sources indicate that potential lenders are skeptical about Saks Global's capacity to successfully reorganize and repay borrowed funds. This hesitation intensified after the company missed an interest payment to bondholders late last month. Consequently, only a few investors have shown interest, with many declining participation.
