Bashas' slated to exit bankruptcy by August

Phoenix Bashas’ Supermarkets, which filed for Chapter 11 bankruptcy in July, said it expects a financing deal by the end of the summer that will save the company from being taken over by a competitor or collapsing altogether.

According to a report by the Phoenix Business Journal, two investment banks are competing to finance $200 million that Bashas’ owes its secured creditors Wells Fargo Bank, Bank of America, BBVA Compass and a group of insurance firms.

“The terms being discussed make a lot of economic sense for Bashas,’” said Michael McGrath, attorney with Mesch Clark & Rothschild.  

Under the plan, the secured creditors would be paid in full.

The unsecured creditors, primarily comprised of independent suppliers and distributors, are owed about $68 million, and they would be paid over a five-year period with interest from Bashas’ operating cash flow.

In February, Bashas’ rejected a $260 million to $290 million offer from Albertsons LLC to buy the company.

A hearing on the financing structure has been set for May 28.