DALLAS _ J.C. Penney said Friday that it has made the $17 million interest payment on its term loan that was due on May 7.
The Plano-based retailer was rumored to be filing bankruptcy Friday because that was the end of a grace period it was in after it had missed the payment.
"The company had entered into such grace period in order to evaluate certain strategic alternatives, none of which have been implemented at this time and which continue to be considered," Penney said.
Trading in the stock had been halted this morning pending news. Trading in the battered stock, which has been trading well below $1 a share in recent months, has resumed and is higher.
Heading into the pandemic, Penney had $1.8 billion in liquidity. As of Feb. 2, that included $386 million in cash and $1.4 billion available on its revolver which it withdrew $1.25 billion of it in March when it closed stores and furloughed employees.
Entering bankruptcy is tough call for Penney. Bankruptcy is not a hospitable place for a retailer that was already trying to reverse sales declines and losses before it 846 stores were forced to shutdown in mid-March.
Depending on how much cash the company has burned through in the last two months, J.C. Penney CEO Jill Soltau has just given the 118-year-old retailer some time.
Cowen Research estimated Penney had an 8-month runway when the pandemic started.
This week, Penney's board approved $9.9 million in new awards to Soltau, chief financial officer Bill Wafford, chief merchant Michelle Wlazlo and chief human resources officer Brynn Evanson. Part of that, $2.4 million, is for performance in 2019 and the rest is for 2020 with stipulations that money is returned in January if they leave.
Last week, Penney averted a breakup with Sephora, which operates shops inside more than 650 Penney stores. The two exchanged court filings and settled their dispute saying they had agreed to mutually beneficial revisions to their joint operating agreement.
