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On Monday, September 18th, Toys R Us announced that the company has filed for bankruptcy protection for its Canadian and US subsidiaries voluntarily under Chapter 11 of the Bankruptcy Code.
In addition, the company’s Canadian subsidiary intends to seek protection in parallel proceeding under the Companies Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice.
The Company intends to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth.
They have received a commitment for more than $3 billion US in debtor-in-possession financing from various lenders, which subject to court approval, is expected to immediately improve the company’s financial health and support its ongoing operations.
"Today marks the dawn of a new era at Toys R Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way," said Dave Brandon, Chairman and Chief Executive Officer, in a statement.
"Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.”
Toys R Us has nearly 65,000 employees worldwide and has approximately 1,600 stores around the world, the vast majority of which are profitable, are continuing to operate as usual.
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