Fleming Companies takes steps to bolster liquidity
Apr 16, 2003 12:00 PM, from staff and wire reportsFleming Companies Inc has taken actions intended to strengthen its liquidity, further support trade vendors, and assist in restructuring as it proceeds through the Chapter 11 process. The Lewisville TX-based supermarket supplier filed a motion in the United States Bankruptcy Court in Wilmington DE requesting approval for:
•A $150 million senior secured debtor-in-possession (DIP) financing facility.
•Creation of a trade lien on company assets to provide further financial assurance and protection to trade vendors and to restore trade terms from vendors that participate in the trade lien program.
The court is scheduled to hear the motion April 21, 2003.
Fleming’s proposed $150 million DIP facility will be used to supplement the company’s existing cash flow during restructuring. This financing includes the $50 million interim funding commitment the firm received as a bridge April 3, 2003.
Under Fleming’s proposed trade lien agreement, trade vendors that meet certain requirements—such as agreeing to ship to the company and restoring trade terms—will be eligible to participate in a lien on the company’s assets.