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Bi-Lo Files Chapter 11 Bankruptcy 2009-03-24

Saying its lenders were unable to extend terms on a loan set to mature this week, supermarket chain Bi-Lo LLC filed for Chapter 11 bankruptcy protection on Monday.

Jon Springer, Executive Editor

March 24, 2009

1 Min Read
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JON SPRINGER

GREENVILLE, S.C. — Saying its lenders were unable to extend terms on a loan set to mature this week, supermarket chain Bi-Lo LLC here filed for Chapter 11 bankruptcy protection on Monday. The filing comes only weeks after a former sister chain, Bruno’s Supermarkets, filed its own Chapter 11 petition. Both chains are owned by Lone Star Holdings, a Dallas-based private equity firm, which acquired them together from Ahold in 2005.

Bi-Lo named a new chief executive officer, Michael Byars, last month. Bi-Lo operates 215 supermarkets in the Southern U.S.

In court papers filed Monday, the company said the “vast majority” of its stores were “desirable operations,” but noted that revenues and earnings have declined for several years. It said it was projecting EBITDA of $52 million in 2009, down from $78 million in 2008, $96 million in 2007 and $114 million in 2006.

“Bi-Lo believes it has excellent chances for a successful reorganization,” the chain added, by shedding dark and underperforming stores and concentrating on increased promotional and merchandising efforts.

The company said its chief cause for the filing was the unwillingness of some lenders to negotiate reasonable terms for an extension of a loan set to mature this week. Bi-Lo said the lenders would likely commence collection and foreclosure actions after the company defaulted on the $360 million loan this week.

Bi-Lo said it has secured a $100 million bankruptcy loan from GE Capital so that it can pay suppliers and employees.

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About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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