Fabric and crafts retailer Joann Inc ( JOAN ) shares are trading higher after the company and some of its affiliates have initiated voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware. 

In connection with the recapitalization plan, the company has entered into a Transaction Support Agreement (TSA) with a majority of its financial stakeholders and industry financing parties.

Joann ( JOAN ) has received commitments for about $132 million in new financing and related financial accommodations.

Through the action, the company expects to reduce funded debt on its balance sheet by approximately $505 million. 

The parties have also agreed to a six-month extension of the company’s existing ABL and FILO credit facilities.

JOANN ( JOAN ) expects to complete the restructuring process on an expedited basis, as early as late April 2024.

“This agreement is a significant step forward in addressing JOANN’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us,” said CFO Scott Sekella.

JOANN’s stores and the JOANN.com website will remain open and continue operating as normal and customers vendors, landlords, and other trade creditors will not see any disruption in services.

Price Action: JOAN shares are trading higher by 64.9% at $0.38 in premarket on the last check Monday.