Bi-Lo chain enters bankruptcy
Bi-Lo, one of the biggest grocery-store chains in the Charleston region, sought bankruptcy protection Monday after it was unable to either refinance or repay a large loan coming due this week.
All of the company's stores remain open and will operate without interruption.
The company said it plans to emerge from its court-supervised financial restructuring quickly.
The Mauldin-based company, which has 15 stores in the Charleston area, sought protection from its creditors in the U.S. Bankruptcy Court in Columbia. It blamed the move on a $260 million two-year loan that's due to be repaid Thursday.
Bi-Lo was unable to repay or refinance the loan and the lenders refused to extend the maturity date, according to court papers.
"In a normal credit environment we would have expected to refinance the maturing term loan on reasonable terms in the ordinary course of business," Bi-Lo chief executive officer Michael Byars said in a statement.
He said after extensive discussions with lenders and "consideration of all available alternatives, we determined that in order to maintain business operations and customer service without interruption while we address this debt maturity, a court-supervised restructuring is appropriate."
"We intend to move through this process as quickly as possible, and we firmly believe that this course of action will better position Bi-Lo for continued growth and long-term success," said Byars.
General Electric Capital Corp. will provide $100 million in financing to Bi-Lo.
The chain has been owned by Lone Star Funds, a private equity investment firm, since late 2004. It has 215 stores in South Carolina, North Carolina, Georgia and Tennessee and employs about 15,500 workers.
The bankruptcy is not expected to affect day-to-day operations. None of the supermarkets is scheduled to close, and food prices are not expected to rise, said Columbia attorney George Cauthen, who represents Bi-Lo. The company will continue to honor outstanding gift cards, he added.
"The everyday customer won't see a bit of a change," Cauthen said.