SUPERVALU Completes Amendment of Senior Secured Term Loan Agreement
23 May 2016 - 8:30PM
Business Wire
SUPERVALU INC. (NYSE:SVU) today announced it has successfully
completed the amendment of its existing $1.5 billion senior secured
term loan agreement. On July 28, 2015, the Company announced that
it is exploring a potential separation of its Save-A-Lot segment,
and that as part of that process it had begun preparations to allow
for a possible spin-off of Save-A-Lot into a stand-alone, publicly
traded company. This amendment permits the Company and its
subsidiaries to undertake certain transactions reasonably
determined by the Company to be necessary to effectuate a spin-off
of Save-A-Lot.
In the event a spin-off of Save-A-Lot is consummated, the
amendment requires that Save-A-Lot issue a minimum of $400 million
of long-term debt and that SUPERVALU’s term loan balance be reduced
by a minimum of $350 million (including with the net cash proceeds
of the Save-A-Lot debt issuance). In addition, SUPERVALU would be
required to retain at the time of a spin-off of Save-A-Lot a
certain minimum equity stake in the spun-off, publicly traded
Save-A-Lot company. In accordance with the terms of the amendment,
the net cash proceeds from any future monetization of such retained
equity stake could be required to be used to reduce the term loan
balance.
“We are pleased to have been able to work with our term loan
lenders to execute this amendment,” said Executive Vice President,
Chief Operating Officer and Chief Financial Officer Bruce Besanko.
“The Company now has the flexibility under its credit agreements to
further explore the previously announced potential separation of
Save-A-Lot into a stand-alone, publicly traded company.”
The amendment increases the interest rate margin above LIBOR
from 3.50 percent to 4.50 percent (and up to 4.75 percent in the
event of a downgrade of certain of the Company’s credit ratings),
while the LIBOR floor remains at 1.00 percent. In addition, the
amendment increases the Company’s flexibility to execute certain
sale and leaseback transactions and acquisitions under the term
loan agreement. The amendment also modifies certain covenants and
other provisions set forth in the term loan agreement. The maturity
date of the term loan remains March 21, 2019.
Goldman Sachs Bank USA and Barclays acted as joint lead
book-runners and joint lead arrangers on the amendment.
About SUPERVALU INC.
SUPERVALU INC. is one of the largest grocery wholesalers and
retailers in the U.S. with annual sales of approximately $18
billion. SUPERVALU serves customers across the United States
through a network of 3,588 stores composed of
1,796 independent stores serviced primarily by the Company’s
food distribution business; 1,360 Save-A-Lot stores, of which 897
are operated by licensee owners; and 200 traditional retail grocery
stores (store counts as of February 27, 2016). Headquartered
in Minnesota, SUPERVALU has approximately 40,000 employees. For
more information about SUPERVALU visit www.supervalu.com.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
Except for the historical and factual information contained
herein, the matters set forth in this news release, particularly
those pertaining to SUPERVALU’s expectations, guidance, or future
operating results, and other statements identified by words such as
"estimates," "expects," "projects," "plans," "intends," and similar
expressions are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including uncertainties as to the Company’s continued
access to credit on acceptable terms, the sufficiency of short-term
and long-term financing to support the Company’s strategic and
operational investments, the terms, timing or structure of any
Save-A-Lot separation transaction and whether one will be
consummated at all, the impact of any separation transaction on the
businesses of SUPERVALU and the Save-A-Lot business on a standalone
basis if the separation were to be completed, whether the
operational and strategic benefits of a separation can be achieved
and whether the costs and expenses of the separation can be
controlled within expectations. Other factors include competition,
ability to execute operations and initiatives, ability to realize
benefits from acquisitions and dispositions, reliance on wholesale
customers and licensees ability to grow or maintain identical store
sales, ability to maintain or increase margins, substantial
indebtedness, labor relations issues, escalating costs of providing
employee benefits, relationships with Albertson’s LLC, New
Albertson’s Inc., and Haggen, intrusions to and disruption of
information technology systems, impact of economic conditions,
commodity pricing, governmental regulation, food and drug safety
issues, legal proceedings, pharmacy reimbursement and health care
financing, intellectual property protection, severe weather,
natural disasters and adverse climate changes, disruption to supply
chain and distribution network, changes in military business,
adequacy of insurance, volatility in fuel and energy costs, asset
impairment charges, fluctuations in our common stock price and
other risk factors relating to our business or industry as detailed
from time to time in SUPERVALU's reports filed with the SEC. You
should not place undue reliance on these forward-looking
statements, which speak only as of the date of this news release.
Unless legally required, SUPERVALU undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160523005451/en/
SUPERVALU INC.For
Investors:Steve Bloomquist,
952-828-4144Steve.j.bloomquist@supervalu.comFor MediaJeff Swanson,
952-903-1645Jeffrey.swanson@supervalu.com
Supervalu (NYSE:SVU)
Historical Stock Chart
From Apr 2024 to May 2024
Supervalu (NYSE:SVU)
Historical Stock Chart
From May 2023 to May 2024