Belk Inc., as expected, filed for bankruptcy protection in Houston, TX commencing “Pre-Packaged, One Day” reorganization. The plan calls for the reduction of $450 million in debt from the department store’s balance sheet and a $225 million capital infusion, supplied by Belk lenders and its private-equity owner Sycamore.
Belk was scheduled to appear Wednesday in the U.S. Bankruptcy Court in Houston to seek confirmation of a restructuring plan that creditors have voted unanimously to support. Sycamore, which has controlled the company since 2015. will remain the owner.
Belk has secured financing commitments for $225 million in new capital from Sycamore Partners, global investment firms KKR and Blackstone Credit, and certain existing first-lien term lenders (the “Ad Hoc First Lien Lender Group”). Belk has also secured an extension of the early consent deadline for additional lenders to provide commitments for the $225 million of new capital.
With nearly 300 stores, mostly in the Southeast, Belk generated $3.8 billion in revenue in the 12 months ended November, according to Moody’s Investors Service. As of last month, the company was carrying $1.9 billion in debt.
Belk is being advised by law firm Kirkland & Ellis LLP, financial adviser Alvarez & Marsal and investment banker Lazard Frères & Co.
Judge Marvin Isgur has been assigned to the bankruptcy case, numbered 21-30630.
Photo courtesy Belk
