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June 3, 2019updated 04 Jun 2019 11:11am

Floral and gifting retailer FTD files for bankruptcy protection

US-based floral and gifting retailer FTD Companies, along with its subsidiaries, has filed voluntary petitions under Chapter 11 in the US Bankruptcy Court for the Southern District of District of Delaware.

US-based floral and gifting retailer FTD Companies, along with its subsidiaries, has filed voluntary petitions under Chapter 11 in the US Bankruptcy Court for the Southern District of District of Delaware.

Through the court-supervised restructuring process, the company aims to complete its strategic initiatives, protect its ongoing business operations and offer a binding mechanism to sell certain  businesses, and address a near-term debt maturity.

FTD has also received commitments for around $94.5m in debtor-in-possession (DIP) financing from a syndicate comprised of its existing lenders.

The DIP financing, currently subject to the court approval, along with cash generated from its ongoing operations will assist the company to support the business.

“The important actions we are taking today are designed to enable us to continue supporting our network of florists and business partners.”

The retailer has also filed several customary motions, with the court seeking authorisation, to support its operations during the restructuring process and ensure a smooth transition into Chapter 11.

A definitive asset purchase agreement has been signed with an affiliate of private equity firm Nexus Capital Management to purchase FTD’s North America and Latin America Consumer and Florist businesses, including ProFlowers for $95m in cash.

The retail group also shifted ProFlowers orders into the FTD florist network to reduce costs and better serve customers.

FTD has also signed a non-binding letter of intent with a strategic investor to acquire Personal Creations, and with Farids to acquire Shari’s Berries.

Both the agreements are subject to the parties reaching definitive asset purchase agreements that will be implemented through court-supervised sale processes.

The company has also sold its UK-based Interflora business to a subsidiary of The Wonderful for $59.5m in cash. The business is not part of the Chapter 11 filing.

FTD president and CEO Scott Levin said: “The important actions we are taking today are designed to enable us to continue supporting our network of florists and business partners and serving consumers while we work to complete the initiatives coming out of our strategic review.

“Over the last several months, we conducted a robust strategic review to determine the best path forward for our company.

“With the advice and support of our outside advisors, we have initiated this court-supervised restructuring process to provide an orderly forum to facilitate sales of our businesses as going concerns and to enable us to address a near-term debt maturity.”

Jones Day, Moelis & Company and Piper Jaffray & Co are serving as legal advisor, investment bankers and financial advisors, respectively, while AP Services is acting as chief restructuring officer.