Belk Closes Deleveraging Transaction and New Capital Investment, Positions the Company for Continued Growth and Long-Term Success
23 Julio 2024 - 7:27AM
Business Wire
Substantial reduction in debt and new
investment expands access to industry standard financing options
for valued merchandise partners
Belk, Inc. (“Belk” or the “Company”), a privately-owned
department store with nearly 300 stores across the Southeastern
United States, today announced that it has completed a
value-maximizing deleveraging transaction (the “Transaction”) with
the Company’s first and second lien lenders and equity sponsor,
Sycamore Partners (“Sycamore”). Through the Transaction, Belk has
reduced its outstanding debt by more than $950 million, amended its
existing asset-based credit facility to extend the maturity date to
July 2029, and secured approximately $485 million in new capital,
including (i) $275 million of secured term loans and (ii) a $210
million securitization facility secured by revenue streams from the
Company’s loyalty credit card program.
The Transaction is the result of Sycamore’s efforts with Belk’s
lenders to significantly deleverage the Company’s capital
structure, preserve thousands of jobs, and provide the business
with additional liquidity to expand national vendor partnerships.
This strategic step strengthens the Company’s financial position
and further enhances its ability to deliver for its customers and
partners.
“Today’s announcement marks a pivotal milestone for Belk as we
move into the future with a capital structure that positions our
business for sustainable, long-term growth and profitability,” said
Don Hendricks, Belk’s Chief Executive Officer. “We are confident
that our stronger balance sheet will enable us to build on the
momentum and growth we’ve seen in recent quarters, better serve our
customers and their communities and be an even stronger partner to
our vendors.”
Through this transaction, certain of Belk’s existing lenders,
including funds associated with KKR and Hein Park, will have a
controlling interest in the business, as the Company continues to
execute its strategic plan and drive growth.
Advisors
Kirkland & Ellis LLP served as legal advisor, Lazard Frères
& Co. LLC served as investment banker, KKR Capital Markets LLC
served as the structuring agent and sole arranger on the card
program securitization, and C Street Advisory Group served as
strategic communications advisor to Belk.
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal
advisor, and Evercore served as investment banker to an ad hoc
group of first lien term loan lenders.
About Belk
Charlotte-based Belk, Inc., a privately-owned department store,
opened its first store in 1888, beginning a legacy of selling great
products at great prices, treating customers like family, and
giving back to the community. Today, Belk serves customers at
nearly 300 Belk stores in 16 Southeastern states, at belk.com and
through the mobile app. For over 130 years, Belk has proudly put
customers and community at the center of what they do, supporting
local charities, organizations, and families when they need it
most. For more information visit https://newsroom.belk.com/.
To shop, find your local store at https://www.belk.com/stores/,
visit belk.com or download the Belk app in Google Play or Apple
Store.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240722937608/en/
Media: Belk@thecstreet.com