NO MORE PARTIES. A CHAIN OF HOLIDAY STORES ON THE VERGE OF BANKRUPTCY

Information about this appeared last Friday in The Wall Street Journal. The publication refers to informed sources familiar with the circumstances.

It is noted that the seller of balloons and various accessories for the organization of holidays suffered from an increase in the cost of delivery, a shortage of helium and a decrease in demand. The company previously received a quarter of all revenue during the Halloween period. In 2015, it amounted to about $560 million. Sales for Halloween in 2022 disappointed investors.

According to expert data, the capitalization of Party City Holdco Inc., which operates a network of 750 stores in the USA, Canada and Mexico, is about $41 million. But recently, the organization has faced a number of negative factors affecting the decline in sales and the growth of debt obligations.

The company has started preparing for a possible bankruptcy, which may result in a change of owners. Creditors of Party City (including Capital Group Cos Inc., Silver Point Capital) have begun negotiations on a possible restructuring. The result of this may be the transition of the retailer under the control of creditors and the exchange of debt for shares.

It became known that the company hired a number of firms specializing in bankruptcy and corporate governance (Moelis &Co., AlixPartners LLP and others) to explore options for possible restructuring, including the possible attraction of additional capital. The money supply owned by the organization is rapidly declining, while the debt burden has increased significantly. This also affected the company's bonds, which mature in August 2023.

It is noted that in the third quarter of 2022, the amount of Party City cash available through several credit lines was $92 million. At the same time, the company's debts amount to almost $1.8 billion. The bonds issued by the company at 8.75% with maturity in 2026 are already trading at a price of 31.8 cents per dollar.

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