Save A Lot will hand its business over to creditors and receive $138 million in fresh capital under an agreement that aims to save the private equity-backed discount grocer from bankruptcy, WSJ Pro Bankruptcy reported. Save A Lot said on Friday that it will shed $400 million in debt under the restructuring deal, which has the support of creditors holding a two-thirds supermajority of the company’s term loan debt. The company expects the deal to close in the first quarter. Save A Lot, owned by Toronto-based Onex Corp. since 2016, needs the support of all its term lenders to close the transaction. If all the lenders don’t agree, the company could implement the deal through a speedy, pre-packaged bankruptcy process. Onex’s equity stake would be diluted or wiped out in either scenario. Save A Lot has more than 1,100 corporate and licensed stores in 33 U.S. states and 14 wholesale distribution centers. The company ran into financial difficulties even though consumer spending at discount grocers and club chains has been increasing in recent years, pressuring regional, middle-market companies.
