Daily News: April 15, 2013

Orchard Supply Readies For May 1 Restructuring Deadline


The Wall Street Journal reported that Orchard Supply Hardware Stores, a hardware and garden chain spun off from Sears Holdings in 2012, has hired restructuring lawyers at DLA Piper and financial advisor FTI Consulting, while the company’s term loan lenders are seeking a refinancing of the company’s capital structure to occur by May 1, 2013.

The Journal notes, citing people familiar with the matter, some of the lenders involved in the restructuring have enlisted turnaround firm Zolfo Cooper and attorneys at Deckert to assist with the refinancing.

According to a February 15, 2013 news release, Orchard Supply said it is working with investment bank Moelis & Co. to refinance its debt and continues to explore actions designed to restructure its balance sheet, including seeking new long term debt and/or equity.

Orchard also said it expanded its existing senior secured credit facility with Wells Fargo Capital Finance and Bank of America, as ABL administrative agent & collateral agent and syndication agent, respectively to increase its total borrowing capacity to $145 million through the addition of a $17.5 million “last-in-last-out” supplemental term loan tranche.

According to a related 8-K filing, Orchard said it reached an agreement with its term loan lender group that by May 1, 2013, with regard to refinancing or modifications to its capital structure, failure to comply with the terms of an existing waiver could cause the effectiveness of the waiver to terminate. Upon such termination, there would be a default under the term loan.

The filing notes that as a result of a cross-default provision under its debt agreements, a default under the term loan agreement could result in a default under the above referred credit agreement.

To read the entire WSJ story, click here.

Previously on abfjournal.com:
WFCF, BofA Increase Orchard Supply Hardware ABL Facility, Tuesday, February 19, 2013