Bradlees Inc. has arranged a new $500 million debtor-in-possession financing package with a group of banks led by BankBoston Corp.
The Braintree, Mass.-based discount retailer has been in Chapter 11 bankruptcy since June 1995. The company's problems largely stemmed from competition from larger discount competitors, including Wal-Mart Stores Inc. and the Target chain, owned by Dayton-Hudson Corp.
Bradlees' new financing includes a $250 million debtor-in-possession facility with a term of up to 18 months. The credit replaces a $200 million debtor-in-possession credit led by Chase Manhattan Corp.
The deal also includes a $250 million post-bankruptcy revolving credit facility.
"Bradlees is in its healthiest position since entering Chapter 11, and the new $250 million facility will further strengthen our financial position," said Peter Thorner, chairman and chief executive officer of Bradlees in a statement.
The financing, which is subject to bankruptcy court approval, would provide Bradlees with additional liquidity, enhanced borrowing capacity, financial covenants, and lower financing costs, the retailer said.
Bradlees also said it has filed a motion seeking bankruptcy court approval of a six-month extension of its right to propose and file a reorganization plan through Aug. 3, 1998.
Following the announced closing of six underperforming stores expected to conclude in February 1998, the company will operate 103 stores in seven states.
- Omri Ben-Amos