Albertsons 2013 Annual Report Download - page 99

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Divestitures
During the second quarter of fiscal 2012, the Company announced it had reached an agreement to sell 107 fuel
centers which were part of the Retail Food segment. The Company received $89 in cash and recognized a pre-tax
loss of $7 during fiscal 2012, of which $1 and $6 of the pre-tax loss is presented as continuing operations and
discontinued operations, respectively, related to the sale of the fuel centers. The Company finalized the sale of
the fuel centers during the third and fourth quarters of fiscal 2012.
NOTE 16—SUBSEQUENT EVENTS
On March 21, 2013, the Company completed the sale of NAI for $100 in cash subject to working capital
adjustments, and the assumption of certain debt and capital lease obligations of approximately $3,200, which
were retained by NAI.
Concurrently with the execution of the Stock Purchase Agreement, the Company entered into a Tender Offer
Agreement (the “Tender Offer Agreement”) with Symphony Investors, LLC, owned by a Cerberus Capital
Management, L.P. (“Cerberus”)-led investor consortium (“Symphony Investors”) and Cerberus, pursuant to
which, upon the terms and subject to the conditions of the Tender Offer Agreement, and contingent upon the NAI
Banner Sale, Symphony Investors tendered for up to 30 percent of the issued and outstanding common stock of
the Company at a purchase price of $4.00 per share in cash (the “Tender Offer”). Approximately 12 shares were
validly tendered, representing approximately 5.5 percent of the issued and outstanding shares at the time of the
Tender Offer expiration on March 20, 2013. All shares that were validly tendered and not properly withdrawn
were accepted for payment in accordance with the terms of Tender Offer. In addition, pursuant to the terms of the
Tender Offer Agreement, on March 21, 2013, SUPERVALU issued approximately 42 additional shares of
common stock (approximately 19.9 percent of outstanding shares prior to the share issuance) to Symphony
Investors at the Tender Offer price per share of $4.00, resulting in $170 in cash proceeds to the Company, which
brought Symphony Investors ownership percent to 21.2 percent after the share issuance. Cash proceeds from the
share issuance provided additional cash inflows from financing activities of $170 during the first quarter of fiscal
2014, which were used to reduce outstanding borrowings under the ABL Facility described below. The share
issuance will have a dilutive effect on future net earnings (loss) per share due to the additional 42 shares
outstanding.
Following the sale of NAI, the Company remains contingently liable with respect to certain self-insurance
commitments as a result of parental guarantees issued by SUPERVALU INC. with respect to the obligations of
NAI that were incurred while NAI was a subsidiary of the Company. The total amount of all such guarantees was
$411 and represented $369 on a discounted basis. Because NAI remains a primary obligor on these self-insurance
obligations, the Company believes that the likelihood that it will be required to assume a material amount of
these obligations is remote. Accordingly, no amount has been recorded in the Consolidated Balance Sheets for
these parent guarantees.
On March 21, 2013, the Company entered into (i) an amended and restated five-year $1,000 asset-based
revolving credit facility (the “ABL Facility”), secured by the Company’s inventory, credit card receivables and
certain other assets, which will bear interest at the rate of LIBOR plus 1.75 percent to LIBOR plus 2.25 percent,
depending on utilization and (ii) a new six-year $1,500 term loan (the “Term Loan Facility”), secured by
substantially all of the Company’s real estate, equipment and certain other assets, which will bear interest at the
rate of LIBOR plus 5.00 percent and include a floor on LIBOR set at 1.25 percent (collectively, the “Refinancing
Transactions”).
The proceeds of the Refinancing Transactions were used to replace the Company’s existing five-year $1,650
Revolving ABL Credit Facility, the existing $850 Secured Term Loan Facility and the $200 accounts receivable
securitization facility, and refinanced the $490 of 7.5% senior notes due 2014.
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