Kings Food Markets and Balducci’s Food Lover’s Market will continue to operate as normal, even as the supermarkets’ parent, KB US Holdings Inc., has filed for Chapter 11 bankruptcy protection and accepted a “stalking horse” takeover bid of $75 million, the company announced.
In a news release issued late Sunday night, the Parsippany-based holding company said it hopes to close a sale in the next 60 days. The filing in U.S. Bankruptcy Court is intended to facilitate an orderly process, it noted. TLI Bedrock is the stalking horse bidder, with its $75 million offer setting a starting point for the transaction.
“We are pleased to be moving forward with a sale so we can position Kings and Balducci’s for even greater long-term success,” KB US CEO Judith Spires said in a prepared statement. “During this COVID crisis, our associates and communities have demonstrated not only the viability, but absolute necessity of our markets in their communities.”
KB has obtained a commitment for $20 million in debtor-in-possession financing from an existing secured lender, which — combined with cash from ongoing operations — should support the business through the sale process. The company said it has sufficient liquidity to meet obligations and will operate business as usual and pay partners for goods and services provided on or after the Chapter 11 filing date, formally Sunday.
“Our sales and service have never been stronger; we are confident we will emerge from this process without missing a beat, well-positioned for future stability and success,” Spires said.
Proskauer Rose LLP is serving as KB’s legal counsel, Ankura Consulting Group is serving as restructuring adviser and PJ Solomon is serving as investment banker.