Party City (NYSE:PRTY) Holdco Inc has sought funding for a potential Chapter 11 bankruptcy, according to a report by Bloomberg News citing people with knowledge of the matter.
Per the report, the New Jersey-based party goods company is preparing to enter bankruptcy protection within weeks and is sharing information with potential providers of debtor-in-possession financing.
The company has been negotiating with a creditor group that includes Capital Group Cos Inc and Silver Point Capital, according to Bloomberg.
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The embattled retailer, which is known for selling balloons and other party supplies, has faced numerous challenges in recent times, including issues around securing its helium supply and higher prices.
On December 15, 2022, the New York Stock Exchange warned the company it could be delisted from the exchange because it had failed to meet the requirement of an average closing share price of at least US$1 over a 30-day trading period.
The company has six months to meet this requirement, or it will be delisted.
Shares of Party City (NYSE:PRTY) rose on Wednesday morning on the news of its bankruptcy preparations, up 9.6% at US$0.50 shortly after the market opened.
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