Brookfield Property Group and Simon Property Group have reached an agreement to acquire largely all of JCPenney’s retail and operating assets (OpCo) for $1.75bn.

US department store chain JC Penney agreed to sell JCPenney through a court-supervised sale process.

It is planning to implement a “stalking horse” assets purchase agreement (APA).

The deal includes a combination of cash and new term loan debt.

As part of the agreement, the companies intend to form a separate real estate investment trust and a property holding company (PropCos).

The company’s Ad Hoc Group of First Lien Lenders will own the company; the PropCos will include the company’s 161 real estate assets and owned distribution centres.

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In addition, JC Penney will work on obtaining disclosure statement approval and reorganisation plan confirmation.

JCPenney chief executive officer Jill Soltau said: “We have determined that an agreement with Brookfield and Simon, as well as the formation of separate real estate investment trusts owned by our First Lien Lenders, is the best path forward to maximise value for our stakeholders, ensure we keep the most stores open and associates employed, and position JCPenney to build on our over 100-year history.

“The interest in our operations reflects our company’s strength and our loyal customer base.

“It is a testament to the hard work and dedication of our talented associates and the progress we have made in implementing our Plan for Renewal to Offer Compelling Merchandise, Drive Traffic, Deliver an Engaging Experience, Fuel Growth, and Build a Results-Minded Culture.”

Following the agreement’s execution, the company is allegedly filing a motion to conduct an auction in accordance with Section 363 of the US Bankruptcy Code.

For this, JCPenney will seek approval from the US Bankruptcy Court for the Southern District of Texas.

JC Penney should “emerge from the Court-supervised process operating under the JCPenney banner in advance of the 2020 holiday season”.

Earlier this month, JC Penney reportedly planned to close additional stores as talks to find buyer fall apart.

In July, JCPenney revealed plans to close 152 underperforming stores as part of its organisational realignment.