Toys ‘R’ Us forced to file for US bankruptcy
September 20 2017 2:30 AM
Toys R Us Stock
US retail giant Toys ‘R’ Us filed has for bankruptcy, under a debt load piled on the business in a private-equity buyout a decade ago.
The company listed debt and assets of more than $1bn each in Chapter 11 documents at the US Bankruptcy Court in Richmond, Virginia.
Prior to filing, the chain secured more than $3bn in financing from lenders including a JPMorgan-led bank syndicate and certain existing lenders to fund operations while it restructures, according to a company statement.
The funding is subject to court approval.
US debtor-in-position loans allow a company to tap new lenders who get preferential security, while it goes through Chapter 11, helping the business trade throughout its insolvency process.
Toys ‘R’ Us didn’t announce plans to close stores, and said its locations across the globe would continue normal operations.
“Like any retailer, decisions about any future store closings – and openings – will continue to be made based on what makes the best sense for the business,” a spokesman said.
The bankruptcy filing is the latest blow to a brick-and-mortar retail industry reeling from store closures, sluggish footfall and the rise of Amazon.com.
A dozen big US retailers have filed for creditor protection this year. (Bloomberg)