Supervalu moves ahead with Save-A-Lot spinoff

Supervalu (NYSE:SVU) has completed a key step that advances the goal of spinning off the Save-A-Lot grocery banner.

The company began exploring a sale in July 2015, filed an IPO with the Securities & Exchange Commission in January, and now has completed the amendment of its existing $1.5 billion senior secured term loan agreement.

"We are pleased to have been able to work with our term loan lenders to execute this amendment," said Bruce Besanko, exec-VP, COO and CFO. "The company now has the flexibility under its credit agreements to further explore the previously announced potential separation of Save-A-Lot into a stand-alone, publicly traded company."

In the event of a spinoff, the amendment requires that Save-A-Lot issue a minimum of $400 million of long-term debt and that Supervalu's term loan balance be reduced by a minimum of $350 million.

Supervalu is also required to retain a minimum equity stake in the publicly traded spinoff Save-A-Lot company.

Save-A-Lot President Ritchie Casteel left the company on March 11 and a replacement was never hired. Save-A-Lot operates roughly 1,360 stores in the United States and is the remaining grocery banner at Supervalu. Once spun off, the company will be wholly focused on its wholesale business.

For more:
- see this Supervalu press release