Southeastern Grocers filed for chapter 11 bankruptcy Tuesday in a reorganization that will aim to reduce its debt by about $500 million.
The Jacksonville, Fla.-based grocer revealed earlier this month that it has entered into a restructuring support agreement with a group of creditors and its private equity sponsor regarding the terms of a comprehensive financial restructuring.
SEG says it plans to keep more than 580 of its grocery stores open, while closing at least 85 and selling more than 30.
"This pre-packaged, court-supervised financial restructuring process provides for a clear and expedited path to put SEG in the best position to serve our communities and succeed in the competitive retail market in which we do business,” said SEG President and CEO Anthony Hucker. “We are extremely pleased that this process continues to proceed quickly and as planned. With each key milestone reached, we move closer to emerging and making Southeastern Grocers into a true success story for our associates, our customers and the communities we serve.”
According to SEG, the restructuring will lower overall debt levels by more than $500 million and maintain the company’s strong liquidity position under the new post-emergence revolving credit facility. This considerable debt reduction should result in reduced interest expense, enabling the company to invest more cash flow back into the business in the form of more store renovations and new locations. With a deleveraged balance sheet and an optimal store base, SEG can then concentrate on store growth and financial health.
SEG has filed various customary motions to obtain the court approval to continue to support its business operations during the restructuring process, including the continued payment of associate wages and benefits without interruption, all of which it expects to be granted.
The company also recently expanded its Fresco y Mas banner by three stores in two new Florida markets.
Southeastern Grocers LLC, one of the largest conventional supermarket companies in the United States, operates grocery stores, liquor stores and in-store pharmacies serve communities throughout Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina.