Dutch retail giant Ahold has offered an alternative financing package to bankrupt US supermarket group Bi-Lo.
Bi-Lo entered Chapter 11 bankruptcy protection last week. The retailer, which runs 215 stores across four southern US states, said it had made the move “to address an upcoming debt maturity”.
In its initial bankruptcy filing, Bi-Lo said that it has received a commitment for a US$100m debtor-in-possession facility from GE Capital.
However, it has emerged that Ahold has put itself forward as an alternative source of funding. The company has offered Bi-Lo a $35m debtor-in-possession loan.
Ahold, Bi-Lo’s former owner, sold the retail chain in 2005. However, the retail giant still acts as guarantor for a number of Bi-Lo’s leases.
“We have taken this action to protect our position,” a spokesperson for Ahold told just-food today (31 March).
A US bankruptcy court will weigh the merits of each funding arrangement.
Bi-Lo said that it would maintain business operations and customer service without interruption during the bankruptcy process.