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Belk announces bankruptcy plan but remains under Sycamore’s ownership

By Ishika@10kinfo.com on Jan 27, 2021 | 03:37 AM IST

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Sycamore Partners-owned Belk Inc. department store announced, it would file for bankruptcy with a $450 million deal to slash its debt. The department store chain will remain under Sycamore's ownership and will receive new funding from the private equity group and other lenders.

Sycamore, the owner of Belk since 2015, and lenders including KKR & Co. and Blackstone Group Inc. have agreed to invest $225 million under restructuring provisions to recapitalize the company that will minimize its balance sheet of $2.6 billion.

According to a statement issued on Tuesday, the strategy for a pre-packaged bankruptcy has approval so far from holders of over 75 percent of Belk's first-lien term loan and 100 percent of its second-lien loan. The goal of the retailer is to quit court protection before the end of February.

Belk was planning a Chapter 11 bankruptcy filing to tame its debt, Bloomberg published on Monday.

According to Moody's Investors Service, with almost 300 stores mainly in the Southeast, Belk generated $3.8 billion in revenue in the 12 months ended November.

Under the bankruptcy plan, Belk suppliers will continue to receive payments for all goods and services in the ordinary course, enabling the company to continue operating normally, the statement said.

Moreover, Under the plan announced, subject to the permission of the bankruptcy court, the remaining liquidation of Belk's loans will be pushed to 2025.


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