April 18 J.C. Penney Co Inc is speaking
with Wells Fargo & Co and others, including parties that
invest in troubled companies, about a new loan to help it shore
up its cash reserves, the Wall Street Journal reported on
Thursday, citing people familiar with the matter.
Other parties involved in talks about providing funds for
the loan include a lending unit of private-equity firm TPG and
Gordon Brothers Group, an investment firm that sometimes
finances troubled retailers, those people said, according to the
Penney and Wells Fargo declined to comment.
The $500 million loan would come due in five years and be
backed by Penney's inventory, accounts receivable and
intellectual property, the people said, according to the report.
Penney is expected to reach a deal on the loan perhaps in
the coming days, with active discussions on Thursday and the
membership of the lending group still fluid, the people said,
according to the Journal.
On Monday, Penney said it had borrowed $850 million from its
$1.85 billion revolving credit facility as it revamps its
business strategy following the departure of Chief Executive Ron
Johnson. Under Johnson, Penney tried to eliminate coupons and
turned off its core shoppers, leading to steep declines in
Last week, Penney brought back Johnson's predecessor, Myron
Ullman, who is expected to return to the chain's old pricing
strategy that relied heavily on coupons to draw in shoppers.