Party City Holdco Inc (NYSE: PRTY) is reportedly on the verge of filing for bankruptcy within the next few weeks due to dwindling cash reserves and weak sales caused by persistently high inflation.
According to the Wall Street Journal, citing individuals with knowledge of the situation, the company has enlisted the assistance of restructuring firm AlixPartners LLP to address its financial issues.
To reduce its balance sheet, Party City is said to be in negotiations with its bondholders to convert debt into equity. The company's shares plummeted 50% in afternoon trading on Friday after the potential bankruptcy filing was announced.
It is currently uncertain how the restructuring process will proceed, but the fact that Party City has sought the help of a specialist adviser indicates that the company is facing serious financial difficulties. Party City and AlixPartners have not yet commented on the reports.
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