According to a report in the Wall Street Journal, PacSun has hired investment banking and restructuring firms to help it figure out its debt problems.
The WSJ is reporting that PacSun has hired Guggenheim Securities in New York and restructuring specialist FTI Consulting.
Citing anonymous sources, the WSJ said the company is weighing its options whether to restructure the debt outside of court, or as part of a restructuring under chapter 11.
FTI Consulting is often involved in corporate restructuring efforts, including in the Quiksilver, Sports Authority and American Apparel cases.
PacSun’s term loan with Golden Gate Capital is due on Dec. 7, 2016, including the principal balance and any unpaid interest.
According to PacSun filings, the balance due at the end of this year is $75.6 million. Golden Gate is a private equity firm with more than $15 billion in capital and owns about 19% of outstanding PacSun stock.
PacSun has a $100 million revolving credit line with Wells Fargo that also matures on Dec. 7, 2016. Any outstanding balances will be due at that time. At the end of October, the company had $35 million outstanding on the loan.
We have an email in to PacSun CEO Gary Schoenfeld to see if he wants to comment on the WSJ story.
In September, we talked with Gary about PacSun’s balance sheet challenges. SES members can read that story here.
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