Southeastern Grocers (SEG), parent company of BI-LO, Fresco y Más, Harveys Supermarket and Winn-Dixie grocery stores, has entered into a Restructuring Support Agreement (RSA) with a group of creditors collectively holding 80% of its Unsecured Notes due September 2018 and its private equity sponsor regarding terms of a financial restructuring that will position the company for long-term financial health.
SEG will continue operating throughout this process.
Anthony Hucker, president and chief executive officer of SEG, said, “The agreement we announced is an important step in Southeastern Grocers’ transformation to put our company in the best position to succeed in the extremely competitive retail market in which we do business. With a foundation built on iconic, heritage banners, and with the strong support of our leadership team, we will work through this process as quickly and efficiently as possible. We are excited to emerge with the optimal store footprint and greater financial flexibility to invest in Southeastern Grocers’ growth.”
Under terms of the proposed restructuring:
•The company’s outstanding secured debt obligations, including its Secured Notes and the 2014 Revolving Credit Facility, will be paid in full.
•The company has secured 100% committed exit financing in the form of a senior secured six-year term loan facility in the original principal amount of $525 million and an asset-based lending (ABL) revolving credit facility.
•The Unsecured Notes will be canceled in exchange for 100% of equity in the reorganized company.
•Holders of general unsecured claims, including supplier partners, contract counterparties, and all other trade creditors, will receive payment in full on account of existing obligations in the ordinary course of business.
•The holder of the company’s existing equity will receive a five-year warrant (subject to dilution) and certain global settlement consideration.
•582 stores will continue to operate throughout the company’s footprint. 94 stores will close, many of which will have their related leases rejected and lease rejection claims rendered unimpaired.
The company plans to implement terms of the proposed financial restructuring by soliciting votes from holders of its Unsecured Notes and holders of its equity on a pre-packaged plan of reorganization and commencing voluntary cases under Chapter 11 of the US Bankruptcy Code with the US Bankruptcy Court for the District of Delaware by the end of March.
Go to www.segrocers.com/restructuring to learn more.
