Brookfield and Simon acquire substantially all of JCPenney’s retail and operating assets through cash and new term loan debt. Credit: Phillip Pessar via flickr.

Department store chain JCPenney has moved one step closer to its sale with the filing of a draft asset purchase agreement (APA) to US mall owners Brookfield Property Partners and Simon Property Group.

Brookfield Property Group and Simon Property Group reached the agreement with JCPenney last month.

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The APA tracks the terms of the previously announced letter of intent to sell the retailer.

Brookfield and Simon will acquire substantially all of JCPenney’s retail and operating assets (OpCo) through a mix of cash and new term loan debt.

JCPenney chief executive officer Jill Soltau said: “This is another important milestone in our restructuring plan, bringing us one step closer to finalising the APA, closing the sale process and exiting Chapter 11 ahead of the December 2020 holiday season.

“Our talented team is focused on working with Brookfield and Simon to build on our over 100-year history of serving customers and working seamlessly with our vendor partners. We look forward to completing this sale and continuing our progress implementing our Plan for Renewal to Offer Compelling Merchandise, Drive Traffic, Deliver an Engaging Experience, Fuel Growth and Build a Results-Minded Culture.”

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The OpCo deal is subject to court approval and other closing conditions.

The court hearing for the transaction should take place in early November, and the deal could close ahead of the December holiday season. Last week, the sale talks between JC Penney lenders and mall owners reportedly stalled as the two firms missed several  deadlines on the deal.

Meanwhile, 160 of its real estate assets and all of its distribution centres will be under a separate holding company owned by a host of lenders.