Gymboree exits Chapter 11, eliminating $900 million of debt

New York, Sept. 29 – Gymboree Corp. said its amended plan of reorganization became effective on Friday.

The company exited its Chapter 11 proceedings under the new name Gymboree Group, Inc. after reducing its debt by $900 million and “right-sizing its store footprint,” according to a news release.

Financing for the reorganized company comes from a new $85 million term loan provided by Goldman Sachs and a $200 million revolving credit facility from Bank of America Merrill Lynch and Citizens.

The reorganized company is owned by its pre-bankruptcy term loan lenders, a group that includes Searchlight, Apollo Global Management, Oppenheimerfunds, Brigade Capital Management, LP, Marblegate, Nomura Securities International and Tricadia Capital Management, LLC.

As previously reported, the plan was confirmed on Sept. 7 by the U.S. Bankruptcy Court for the Eastern District of Virginia.

The bankruptcy filing was made to implement an agreement reached with a majority of its term loan lenders on the terms of a comprehensive financial restructuring and recapitalization.

The pre-negotiated restructuring included an infusion of up to $115 million of new money through both a term loan debtor-in-possession financing facility and an up to $80 million fully backstopped rights offering.

Term loan lenders who contributed their share of the new-money DIP term loan facility and the rights offering obtained the benefit of a $70 million DIP term loan facility roll-up and ultimately shared in newly issued common shares.

Additional new Gymboree common shares were distributed to the consenting term loan lenders who agreed to backstop the rights offering.

Non-participating term loan lenders also received their share of new Gymboree common shares.

Holders of general unsecured claims received a share of $4.5 million in cash.

Holders of critical trade claims necessary to the reorganized company’s business plan were paid in full in cash.

All previous interests in Gymboree were extinguished.

Gymboree, a children’s apparel specialty retailer based in San Francisco, filed for bankruptcy on June 11. The Chapter 11 case number is 17-32986.

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