La Polar Seeking Second Debt Restructuring After 2011 DefaultEduardo Thomson
Empresas La Polar SA, Chile’s fourth-biggest department store operator, said it is planning to restructure debt for a second time following its 2011 default.
La Polar, which defaulted on 493 billion pesos ($1.1 billion) of debt after revealing accounting irregularities at its in-house credit card operation, said in a filing to regulators that it will seek to meet with creditors as soon as possible. It had total debt of 207 billion pesos at the end of 2013, including 189 billion pesos of bonds, according to company financial statements.
The retailer’s board of directors decided to try to renegotiate its bond agreements after reviewing a study completed by Grupo BTG Pactual, according to the regulatory filing. Chairman Cesar Barros said in a statement that the “current financial burden limits La Polar’s capacity to grow and the possibility for shareholders to receive dividends.”
The Santiago-based company’s 2011 default came after it said that it had been unilaterally restructuring past-due consumer loans to make them look current, capping loss provisions and boosting profit. After amending financial reports, it recorded a 2011 loss of $1.12 billion, according to data compiled by Bloomberg.