Winn-Dixie Stores has emerged from bankruptcy, having officially completed its Chapter 11 reorganisation yesterday (21 November).
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In conjunction with the company’s emergence from Chapter 11, Winn-Dixie also closed on its new US$725m exit financing facility, provided by a consortium led by Wachovia Bank.
This financing will now be available to support the company as it invests in updating its current store base, develops new stores and takes actions to position the retail chain more competitively in the markets in which it operates – Florida, Alabama, Louisiana, Georgia, and Mississippi. The company said it also hopes to emerge with only a minimal amount of long-term debt on its balance sheet.
Winn-Dixie CEO and chairman Peter Lynch said: “This is a historic day for the outstanding Associates of Winn-Dixie, who have demonstrated tremendous dedication and focus over the past two years as we have sought to become a better company…. We are exiting bankruptcy having achieved the restructuring objectives we set out when the company first filed its Chapter 11 petition in February 2005. We have reduced our store footprint to focus on those markets in which we believe we are best positioned for success. We have strengthened our balance sheet through significant reduction in debt and asset sales. We have obtained $725m in new financing to significantly improve our liquidity. And we have enhanced our operating cash flows through a combination of increased sales and expense reductions.”
In accordance with the reorganisation plan, Winn-Dixie’s pre-plan common stock was cancelled, effective yesterday. Holders of the old common stock will not receive a distribution of any kind and no further transfers will be recorded on the company’s books, Winn-Dixie said. The company will issue new shares in payment of bankruptcy claims within the next 45 days. There will be approximately 54.5m shares of the new common stock outstanding, the retailer estimated.
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