Beleaguered grocer Homeland Stores is to take up an offer of financial assistance from its main supplier, Kansas City-based Associated Wholesale Grocers (AWG), in its bid to recover from Chapter 11 bankruptcy filed in August.
AWG has offered more than US$47m to help out the 44-store grocery chain, according to a plan filed in a US Bankruptcy Court in Oklahoma City yesterday [Tuesday].
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President of Homeland Holding Corp, David B. Clark, explained that the deal would see AWG take over control of the supermarkets and make payments to secured and unsecured creditors. Homeland shareholders will not receive any payments.
“AWG and Homeland are already business partners, which is a major plus in putting together this opportunity,” he told the Associated Press, adding: “AWG’s involvement in our current financing arrangements has allowed us to move in a strategic and effective manner through the reorganisation process.”
AWG, which supplies about 70% of all of Homeland’s product offering and generates annual sales of more than US$3.2bn, revealed in a press release that “it is AWG’s intention that all acquired stores will remain open and operating under the Homeland banner.”
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