CIT restructuring plan approved by board, bondholders
New York City CIT Group said late Thursday that its restructuring plan has been approved by its board and by the steering committee of its bondholders, according to a report by Associated Press.
The lender — one of the nation’s largest to small and midsized businesses — has launched a debt restructuring effort in hopes of cutting at least $5.7 billion from its balance sheet.
The company is also asking bondholders to approve a prepackaged reorganization plan in case it is forced to file for Chapter 11 bankruptcy protection.
CIT received $2.3 billion in federal bailout aid last fall, a $3 billion emergency loan in July from some of its largest bondholders, and bought back $1 billion in debt. But the company still needs to reduce its debt burden to survive.
Under the terms of the restructuring plan, bondholders would exchange their current notes for a portion of five series of newly issued secured notes, with maturities ranging from four to eight years, and/or newly issued preferred shares.
The exchange offers will expire just before midnight Oct. 29. However, for the out-of-court debt restructuring to be successful, CIT said at least $5.7 billion worth of debt must be able to be wiped off of its balance sheet.
Therefore, CIT also is asking most bondholders and other holders of CIT debt to approve a prepackaged reorganization plan so the company has the option of filing for and quickly exiting Chapter 11 bankruptcy protection in the event the debt swap doesn’t achieve its goals.
“We believe this plan maximizes franchise value and can be executed quickly and effectively through a series of voluntary debt exchange offers or an expedited in-court restructuring process,” said chairman and CEO Jeffrey M. Peek, in a statement. “Upon completion of either alternative, CIT will be a well-funded bank holding company with a strong capital position and market-leading franchises.”
CIT has not commented on what the plan would mean in terms of recouping taxpayers’ $2.3 billion investment.
Some experts have warned that a total collapse of CIT would deal a crippling blow to an economy still bleeding well over 100,000 jobs a month. The retail sector would be hit especially hard, since CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts have said 60% of the apparel industry depends on CIT for financing.
Walgreens celebrates grand opening in Coney Island
DEERFIELD, Ill. Walgreens is celebrating the grand opening of its 7,000th store nationwide at 2590 Coney Island Ave., in Brooklyn, N.Y. State. Local officials will welcome the retailer to another New York neighborhood during a ribbon-cutting ceremony.
The new store in the Gravesend neighborhood, near iconic Coney Island, is Walgreens 20th in Brooklyn and its 67th across the five boroughs. The company employs more than 1,250 people in the city.
As part of the grand opening, the AARP/Walgreens Wellness Tour is offering free health screenings to all adult attendees and flu shot vouchers to uninsured adults in the store’s parking lot on Oct 1. The appearance by the traveling health-screening bus is part of a nationwide tour of nine vehicles to deliver free health screenings across the country for early detection and prevention of diseases, as well as health education. Screenings test for total cholesterol level, blood pressure, bone density, glucose levels and body mass index.
The grand opening will feature a ribbon cutting ceremony, food, music and entertainment. Guest speakers include Brooklyn Borough President Marty Markowitz and other state and local officials. Walgreens also will donate $7,000 to Lenny’s Lighthouse, a Brooklyn charity that provides support to people with disabilities.
Toys’R’Us builds a promotion with LEGO
WAYNE, N.J. Toys”R”Us announced that it has partnered with LEGO Systems to create “Bricktober,” a month-long event at Toys”R”Us stores nationwide and online at Toysrus.com.
During October, Toys”R”Us will be promoting LEGO products with weekly deals, in-store boutiques, special events and exclusive items.
Every week during the month of October, Toys”R”Us stores and Toysrus.com will offer savings on all LEGO products. The deals begin with up to 30% off select LEGO products and with additional specials on more than 230 LEGO construction sets available at Toys”R”Us from Oct. 4 through Oct. 10, while supplies last.
Toys”R”Us is giving LEGO products dedicated boutiques in its stores that will feature the largest assortment of LEGO construction sets available. In addition, the retailer is offering exclusive LEGO products.
“‘Bricktober’ celebrates the influence that LEGO continues to have in building kids’ imaginations and the value that it offers to parents in terms of quality and longevity of play,” said Richard Barry, VP, divisional merchandise manager for Toys”R”Us, U.S. “With hundreds of sets to choose from, at a wide variety of price points, LEGO products offer affordable fun for the whole family at a wide variety of prices to fit any budget.”