In the last three months alone — April, May and June — GE Capital has made $2.7 billion in loans in the U.S. market, up 135 percent when compared to the first quarter of this year. The funding has gone to a wide-ranging group of U.S. businesses working hard to power out of the recession. Some recent examples include global packaging company Smurfit-Stone Container and steel maker Insteel; middle market companies like Neff Rental, an equipment renter with a long-standing GE financing relationship; and rapidly growing regional restaurant franchisee, MarLu. Part of that funding — $150 million — went to the BI-LO chain of grocery stores, which was able to tap into GE’s deep sector expertise when it ran into hard times. Just as we described in our story about Boscov’s department stores — a business with deep community roots — bouncing back from bankruptcy with financing from GE Capital, so too, has BI-LO. GE Capital was there when BI-LO needed $125 million in bankruptcy financing, and with that money paid back, GE Capital was there with a new $150 million loan to help the now-healthy business drive forward.
|Blast from the past: “I can honestly say the individuals that I worked with at GE really stepped up and supported us,” says Brian Carney, the executive vice president and chief financial officer of BI-LO. “I didn’t have to worry because they did what they said they would do. We were able to insulate the rest of our business from the bankruptcy.” Photo: BI-LO|
Since it first opened its doors in 1964, BI-LO has been among the most prominent grocery chains in the Southeastern United States. With 207 stores in North Carolina, South Carolina, Georgia and Tennessee, it has become a familiar and welcoming touchstone for generations of shoppers. But on March 23, 2009, the Greenville, S.C.-based company announced it was filing for Chapter 11 bankruptcy. It had failed to get an extension on debt that was coming due.
|BI-LO rides high: As BI-LO notes on its website, the chain was started by “an outlaw” – Frank Outlaw, an executive with Winn-Dixie at the time. He’s pictured on the far right: Photo: BI-LO|
GE Capital provided BI-LO with $125 million, becoming its court-approved DIP (Debtor In Possession) financing lender. The financing helped the company during its reorganization, allowing the supermarket chain to operate with no disruption to its customers or vendors. Fourteen months later, BI-LO accomplished something that few retailers have been able to do: On May 12th, they emerged from bankruptcy intact, and in many ways, a stronger operation than ever before.
BI-LO’s many strengths and its ability to emerge from Chapter 11 relatively unscathed were among the reasons that GE Capital was willing to partner with BI-LO through an uncertain time.
“They are a very good retailer that’s been around for a long time and are very well-respected in the south,” says Tim Tobin, GE Capital’s managing director of corporate retail finance. “They have a good foundation, positive cash flow and solid management. Given this combination of positive factors, it’s a deal that we love.”
|Mod squad: BI-LO and Super BI-LO stores, which are upscale locations with a larger selection of organic and specialty foods, are full-service grocery stores with more than half of them offering in-store pharmacies. Photo: BI-LO|
The business relationship with BI-LO is continuing to move forward now that the organization has come out of bankruptcy. GE Capital put together a $150 million reorganization financing package that facilitates the chain’s exit from Chapter 11, and provides financing for its capital needs going forward.
|Ready to expand: The company’s five year business plan is to put its resources into remodeling existing grocery stores and to start to add five new stores a year by 2013. “We will do everything we can for the company to support them and help them to begin to grow again,” says Tobin. Photo: BI-LO|
Learn more in these GE Reports stories:
* “GE Capital: Helping bankrupt businesses bounce back”
* “Dallas keeps on truckin’ with GE Capital”
* “Navistar & GE Capital: Loaded up and truckin’”
* “Digital start-ups fly higher under Peacock Fund’s wings”
* “Peacock Fund fuels Syfy & game guru Trion venture”
* “Healthymagination Fund’s first investment has heart”
* “Cooking up a recipe for success at Jack in the Box”
* “Brando, McQueen & GE rev up Triumph Motorcycles”
* “GE Capital’s loan helps grow 150 jobs in Shreveport”