BI-LO files voluntary Chapter 11 petition
Mar 30, 2009 1:38 PM
BI-LO LLC and certain affiliates have filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the US Bankruptcy Court, District of South Carolina. The company intends to use the court-supervised process to address an upcoming debt maturity. BI-LO expects to reach mutually acceptable resolutions with all of its constituencies and to exit bankruptcy as expeditiously as possible. Its stores will remain open, and operations will continue without interruption.
"On an operational level, we are making significant progress this year, and we have seen solid sales momentum and strong cash flow," said Michael Byars, president and chief executive officer of BI-LO. "Our strong operations and liquidity position continue to demonstrate the strength of our business model, and the company has continuously satisfied all of its obligations to date, under the term loan and otherwise. In a normal credit environment we would have expected to refinance the maturing term loan on reasonable terms in the ordinary course of business. Unfortunately, the current credit environment is very challenging. After extensive discussions with our lenders and careful consideration of all available alternatives, we determined that in order to maintain business operations and customer service without interruption while we address this debt maturity, a court-supervised restructuring is appropriate. We intend to move through this process as quickly as possible, and we firmly believe that this course of action will better position BI-LO for continued growth and long-term success."
During this period, the company intends to fund operations primarily through its cash on hand and cash generated from operations. To further strengthen its liquidity position, BI-LO has received a commitment for a $100 million debtor-in-possession (DIP) facility arranged by GE Capital. Upon court approval, the financing will be used to support the companyís operational cash flow to meet its normal business obligations.
For access to court documents and other general information about the Chapter 11 case, visit www.kccllc.com/BI-LO.
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