Charlotte, N.C. – Lenders to Belk now have assumed greater control over the regional department store and provided fresh financing.
The company announced that it has completed a deleveraging transaction with KKR and Hein Park – its first and second lien its lenders – as well as its equity sponsor, Sycamore Partners.
The transaction chopped Belk’s outstanding debt by more than $950 million. Simultaneously, the company amended its existing asset-based credit facility to extend the maturity date to July 2029 and secured approximately $485 million in new capital. That includes $275 million of secured term loans and a $210 million securitization facility secured by revenue streams from the retailer’s loyalty credit card program.
The upshot: Some of Belk’s existing lenders, including funds associated with KKR and Hein Park, will have a controlling interest in the privately held business.
The transaction “marks a pivotal milestone for Belk as we move into the future with a capital structure that positions our business for sustainable, long-term growth and profitability,” said Don Hendricks, Belk’s CEO.
He added, “We are confident that our stronger balance sheet will enable us to build on the momentum and growth we’ve seen in recent quarters, better serve our customers and their communities and be an even stronger partner to our vendors.”
Belk currently owns just under 300 Belk stores in 16 Southeastern states.