(ZEROHEDGE) – Don’t count the venerable – if bankrupt – department store and mall anchor tenant, J.C. Penney out just yet.

One week after we reported that J.C. Penney (docket #20-20182, in the U.S. Bankruptcy Court for the Southern District of Texas) was on the verge of liquidation after talks with its two largest landlords had collapsed, today the company’s lenders reached a tentative deal with mall landlords Simon Property Group and Brookfield Property Partners to buy the bankrupt chain. The deal, valued at $1.75 billion, would rescue the beleaguered department store chain from bankruptcy proceedings, averting a liquidation that would have threatened roughly 70,000 jobs and represented one of the most significant business collapses following the coronavirus pandemic, Joshua Sussberg, a Kirkland & Ellis LLP lawyer representing the company, said during a brief court hearing Wednesday, confirming an earlier Reuters report.

The landlords are poised to put $300 million toward the rescue and have agreed to a nonbinding letter of intent with J.C. Penney, he said. The operating company they are acquiring would assume $500 million of debt. The deal also calls for new financing from existing lenders; in the end, J.C. Penney will have about $1 billion of cash to fund its business when the deal closes, Sussberg said.

The financing includes a commitment for $2 billion of new asset-based lending led by Wells Fargo, as well as $500 million of so-called takeback debt from existing first-lien lenders, he said. The deal would split J.C. Penney into an operating company and two real estate holding companies.

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