La Polar Seeks Agreement to Avoid Bankruptcy

Chile’s La Polar plans to seek creditor approval of a judicial agreement to rework its debt and avoid bankruptcy, it says. The Chilean retailer needs the agreement to proceed with a planned CLP100bn capital increase after it set aside loan-loss provisions topping CLP500bn ($1.01bn) last month for consumer-lending losses and fired senior managers when irregularities were found at its consumer lending unit. La Polar’s board has agreed to file a preventative judicial agreement that requires support from creditors representing more than half the outstanding debt to be processed. Bondholders agreed June 20 on a waiver of covenants that allows the company to suspend pre-payments while stockholders approved on June 22 the sale of $200m in new shares.