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Southeastern Grocers enters restructuring agreement

Southeastern Grocers LLC, the parent company of U.S. food retailers Winn-Dixie Stores Inc. and Bi-Lo LLC, said March 15 that it has entered into a restructuring support agreement with creditors and its private equity sponsor.

The restructuring aims to lower company debt by over $500 million and maintain Southeastern Grocer's liquidity position in its existing revolving credit facility. According to the grocery operator, lower debt will allow the company to invest in shop overhauls and new stores.

Under the agreement, Southeastern Grocers will receive an exit financing that consists of a senior secured six-year term loan facility in the principal amount of $525 million, plus an asset-based lending revolving credit facility. The company's unsecured 8.625%/9.375% senior PIK toggle notes due September 2018, collectively held by its creditors, will be exchanged for 100% equity in the reorganized company.

The company said 94 of its stores will be closed, while 582 stores will continue operations.

The agreement is subject to the approval of Southeastern Grocers shareholders who own unsecured notes and shareholders of the company's current equity.

Bi-Lo was previously reported to soon be filing for bankruptcy.