Bashas’ Interim CEO to Associates: Bankruptcy Plans ‘Not a Matter of If…But When’
Bashas’, Inc. is close to securing new financing that would enable it to emerge from bankruptcy protection, potentially by July.
Attorneys briefing the federal bankruptcy judge overseeing the Chandler, Ariz.-based grocer’s reorganization plan last Friday said Bashas’ efforts to quickly secure new financing so it can exit bankruptcy protection has hit a bump in the road from the fluctuations in the global credit market.
Bashas’ intends to take out $200 million in new financing to allow it to fully repay banks and insurance companies holding about $215 million in debt, according to the its lawyers. However, the quick financing deal anticipated in mid-May will take a little longer than anticipated due to the current market fluctuations, which might require an interim deal with its key lenders while it awaits a new loan.
“We’re still working very diligently on our new financing options,” Bashas’ interim CEO Edward Basha said in a letter sent to employees last Friday. “Due to current stock market fluctuations, interest rates are changing daily. In order to reduce costs we are trying to obtain the best possible interest rate for our financing, very similar to how you would want to lock in the best interest rate possible for a home mortgage or car loan. We want to price our company loan at the best rate once the markets stabilize and we are willing to wait until July or later.
“Right now,” Basha continued, “it’s not a matter of if we emerge from Chapter 11, it is a matter of when. I will continue to keep you informed about our Chapter 11 Process.
Bashas’ has closed 31 of its more than 155 stores, cut about 1,000 workers and renegotiated store leases to slash costs after filing for reorganization last July.
Attorneys briefing the federal bankruptcy judge overseeing the Chandler, Ariz.-based grocer’s reorganization plan last Friday said Bashas’ efforts to quickly secure new financing so it can exit bankruptcy protection has hit a bump in the road from the fluctuations in the global credit market.
Bashas’ intends to take out $200 million in new financing to allow it to fully repay banks and insurance companies holding about $215 million in debt, according to the its lawyers. However, the quick financing deal anticipated in mid-May will take a little longer than anticipated due to the current market fluctuations, which might require an interim deal with its key lenders while it awaits a new loan.
“We’re still working very diligently on our new financing options,” Bashas’ interim CEO Edward Basha said in a letter sent to employees last Friday. “Due to current stock market fluctuations, interest rates are changing daily. In order to reduce costs we are trying to obtain the best possible interest rate for our financing, very similar to how you would want to lock in the best interest rate possible for a home mortgage or car loan. We want to price our company loan at the best rate once the markets stabilize and we are willing to wait until July or later.
“Right now,” Basha continued, “it’s not a matter of if we emerge from Chapter 11, it is a matter of when. I will continue to keep you informed about our Chapter 11 Process.
Bashas’ has closed 31 of its more than 155 stores, cut about 1,000 workers and renegotiated store leases to slash costs after filing for reorganization last July.