Big Lots gets OK to access bankruptcy financing
Big Lots has received interim court approval to immediately access a portion of its $707.5 million available bankruptcy financing.
The closeout retailer, which filed for bankruptcy protection on Monday as part of a deal to to sell “substantially all” of its stores and business operations to private equity firm Nexus Capital Management, was given approval to access $550 million of the financing, according to court documents.
The financing, coupled with cash generated from Big Lots’ ongoing operations, is expected to provide sufficient liquidity for the retailer to continue normal operations — including paying employee wages and benefits, and making payments to certain critical vendors the retailer works — as it works the bankruptcy process.
[READ MORE: A&G to sell 296 Big Lots store leases]
Big Lots said it expects to pay vendors in full under normal terms for any goods delivered and services provided after the filing. A "second day" hearing for the court to consider the company's requested relief on a final basis is currently scheduled to occur on Oct. 9.
“With the court relief we have received today and the support of our lenders, we look forward to moving through this process and emerging as a stronger, more-efficient company, well-positioned to serve our customers,” said Big Lots president and CEO Bruce Thorn. "We thank our associates, customers, vendors, and all of our stakeholders for their continued support as we work to achieve Big Lots' full potential."
Under the terms of the sale agreement with Nexus, the private equity firm will serve as the "stalking horse bidder" in a court-supervised auction. The proposed transaction is subject to higher or otherwise better offers, court approval, and other conditions. If Nexus is deemed the winning bidder, the transaction is expected to close during the fourth quarter of 2024.
Davis Polk & Wardwell LLP is serving as legal counsel, Guggenheim Securities, LLC is serving as financial advisor, and AlixPartners LLP is serving as restructuring advisor. A&G Real Estate Partners is serving as real estate advisor to the company. Kirkland & Ellis is serving as legal counsel to Nexus.
