Bradlees Files Plan of Reorganization and Expects Emergence
From Bankruptcy in August
PR Newswire - April 13, 1998 17:32
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BRAINTREE, Mass., April 13 /PRNewswire/ -- Bradlees, Inc. filed its Plan
of Reorganization (POR) and Disclosure Statement with the Bankruptcy Court
today. The Company expects to emerge from Chapter 11 in August, following
approval of the Disclosure Statement by the Bankruptcy Court and acceptance of
the POR by its creditors.
The POR contains distributable value to creditors of approximately
$145 million including: approximately $20 million of administrative claim
payments; a $40 million note primarily payable to the Company's pre-Chapter 11
bank group, which is anticipated to be settled through proceeds of sales of
real estate assets and new Bradlees' stock with an estimated value of
$70 million. As previously reported, the existing Bradlees' stock will be
canceled.
Additionally, the POR provides vendors who support Bradlees after
emergence with a second lien on the Company's inventory. It also proposes
that all potential preference actions against Bradlees' vendors be waived when
the POR is confirmed.
BankBoston and a group of lenders have committed to a three year,
$250 million secured financing facility upon emergence from Chapter 11. This
will provide the Company with continued enhanced liquidity and financial
covenant flexibility on substantially the same basis as the pre-emergence
financing facility.
Chairman and Chief Executive Officer, Peter Thorner stated, "We delivered
a significantly improved operating performance in fiscal year 1997 and have
achieved above plan sales and operating results for the first two months of
the first quarter of fiscal year 1998. It is these operational improvements
and the continued support of our vendors that has enabled us to provide
distributable value to our prepetition creditors and to reach this milestone
in our plan to exit Chapter 11."
"Comparable store sales have been strong for the first two months of this
year due to the merchandising and marketing initiatives started in 1997 and
which continue to build momentum in 1998. We anticipate that these
initiatives will have a continued beneficial impact on sales and profitability
throughout 1998."
Bradlees reported an EBITDA of $35.1 million and a net loss of $22.6
million for 1997 compared to an EBITDA loss of $46.1 million and a net loss of
$218.8 million for 1996. The Company also reported its second consecutive
quarterly net profit in the fourth quarter of 1997.
Safe Harbor Statement: this press release may contain forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
Any such statements are subject to important factors which could cause the
Company's actual results to differ from those anticipated by the forward-
looking statements. These factors are referenced in the Company's POR,
Disclosure Statement, and Annual Report on Form 1O-K.
Bradlees, which operates 103 stores in seven Northeastern states, is a
leading regional discount retailer and one of the nation's largest discount
department store chains, with annual total sales of $1.4 billion.
For facsimile copies of Bradlees' news releases, please call 800-758-5804,
ext. 105750.
SOURCE Bradlees, Inc.
/CONTACT: Anneliz Hannan of Bradlees, 781-380-8354/
/Web site: bradlees.com |
