The largest department store chain in Europe, El Corte Ingles SA, has engaged the services of Morgan Stanley to assist in the drafting of a restructuring plan for its Eur5 billion debt. This was confirmed by three individuals who spoke on condition of anonymity.
The retail firm is seeking to renegotiate terms of its debts with financial institutions, namely Banco Santander SA. The Madrid based department store is seeking to modify its conditions on the terms of its debt, such as extension of maturity.
The company is now seeking to work with other Spanish banks in the reorganization of its debts, according to El Corte Ingles. Included in the plan is to securitize its receivables coming from its consumer finance unit.
El Corte Ingles is facing major issues after the unemployment rate in Spain jumped to 27.2% in the first quarter of the year and the highest in 37 years. This has resulted in a decline of nearly 11% in retail sales for March 2013 compared to 2012 figures.
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