Discount grocer Save A Lot said it has reached an agreement with a substantial majority of its lenders to recapitalize the business and deleverage its balance sheet. An infusion of new capital will support the company’s operations and the acceleration of its business transformation plan.
Under the terms of the agreement, which has been approved by lenders representing 67% of the company’s term loan credit agreement, Save A Lot will receive $138 million in new capital to strengthen the business and provide financial flexibility. In addition, the agreement provides for a reduction of indebtedness of over $400 million, strengthening the company’s balance sheet and significantly reducing annual interest expense. The agreement is subject to finalization of definitive documentation and certain creditor approvals. The company expects to complete this process in the first quarter of 2020.
“The agreement with our lenders is an important step in securing Save A Lot’s long-term success,” said Kenneth McGrath, CEO of Save A Lot. “This is a significant statement of confidence in our business and gives us the appropriate levels of capital to compete effectively.”
He added, “We have an amazing group of retail partners and team members who provide Save A Lot shoppers with high quality products at low prices every day. This new investment is an endorsement of their hard work and dedication to our customers.”