Belk has released its plans for its Chapter 11 bankruptcy filing and reorganization.
The department store retailer expects to file for Chapter 11 on Feb. 24, with the confirmation hearing to approve the restructuring to be held on the same day, at 2 p.m. (Central Time.) Belk will complete its financial restructuring through an expedited “pre-packaged, one-day” reorganization.
The news was not a surprise. On Jan. 26, Belk said that it was planning to file for Chapter 11 bankruptcy protection with a plan to recapitalize its business and reduce its debt burden by approximately $450 million. The retailer will enter into a restructuring support agreement with its majority owner, Sycamore Partners, and the holders of more than 75% of its first-lien term loan debt and the holders of 100% of its second-lien term loan debt.
Belk said the plan is to recapitalize the business, significantly reduce debt by approximately $450 million, and extend maturities on all term loans to July 2025.
Under the terms of the restructuring, Sycamore Partners will retain majority control of Belk. Belk has received financing commitments for $225 million in new capital from Sycamore Partners, KKR and Blackstone Credit, and some of its existing first-lien term lenders. The retailer said it will continue to pay its suppliers and also continue normal operations throughout its financial restructuring process.
Based in Charlotte, N.C., Belk operates nearly 300 stores in 16 Southeastern states. The formerly family-owned business was purchased in 2015 in a $3 billion deal by Sycamore Partners.