BIG LOTS RECEIVES COURT APPROVAL OF "FIRST DAY" MOTIONS TO SUPPORT BUSINESS OPERATIONS

Rhea-AI Summary

Big Lots (NYSE: BIG) received interim U.S. Bankruptcy Court approval for certain "first day" motions and to access a portion of its $707.5 million postpetition debtor-in-possession financing to support operations.

The interim relief permits continued payment of employee wages, benefits, and critical vendors, and supports an ongoing sale process under a September 9, 2024 sale agreement with Nexus Capital Management LP, where Nexus is the stalking-horse bidder. A final "second day" hearing is scheduled for October 9, 2024 at 1:00pm ET, and the parties anticipate a potential closing in Q4 2024 if approved.

Positive

• Interim access to portion of $707.5 million DIP financing
• Liquidity expected to support ordinary-course operations
• Court relief allows continued payment of wages and benefits
• Sale agreement in place with Nexus as stalking-horse bidder

Negative

• Company remains in Chapter 11 restructuring during sale process
• Transaction is subject to higher offers and Court approval
• Final relief depends on October 9, 2024 hearing outcome

Insights

Restructuring M&A Analyst

Court granted interim DIP access and first-day relief; sale to Nexus proceeds under a §363 auction with a Q4 2024 closing target.

The company secured interim court approval to access part of a $707.5 million postpetition financing facility and to continue paying wages, benefits, and critical vendors while operating in the ordinary course. This financing plus ongoing cash flow is stated to provide sufficient liquidity during Chapter 11 and while pursuing a sale to an affiliate of Nexus Capital Management LP under a §363 auction framework.

Reliance on interim financing and a stalking-horse sale structure creates conditional stability but leaves key outcomes unresolved: final court approval of the financing at the October 9, 2024 hearing, the outcome of the auction process, and whether closing occurs in the fourth quarter of 2024. Counterparties will watch for the final DIP order, any competing bids, and the debtor’s postpetition cash performance.

Monitor three concrete items over the near term: final approval at the October 9, 2024 hearing, any announced higher or better bids in the §363 auction, and confirmed closing timing if Nexus is the winning bidder for the expected Q4 2024 close. Each item materially affects creditor recoveries, counterparty continuity, and the company’s ability to exit Chapter 11.

Secures Interim Approval to Access Debtor-in-Possession Financing

Reiterates Commitment to Continue Providing Customers with Unmistakable Value and Extreme Bargains

COLUMBUS, Ohio, Sept. 11, 2024 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) (the "Company") today announced that it received interim Court approval for certain "first day" motions related to the Company's voluntary Chapter 11 proceedings.

Among other relief, the Court granted interim approval for the Company to immediately access a portion of its $707.5 million postpetition financing facilities. This financing, coupled with cash generated from the Company's ongoing operations, is expected to provide sufficient liquidity to support the Company while it continues its operations in the ordinary course of business and works to complete the previously-announced sale transaction with an affiliate of Nexus Capital Management LP ("Nexus").

Additionally, the interim relief granted by the Court will enable the Company to continue paying employee wages and benefits, and making payments to certain critical vendors, in the ordinary course of business. The Company expects to pay vendors in full under normal terms for any goods delivered and services provided after the filing.

A "second day" hearing for the Court to consider the Company's requested relief on a final basis is currently scheduled to occur on October 9, 2024 at 1:00pm ET.

Bruce Thorn, President and Chief Executive Officer, said, "We are focused on delivering on our promise to be the leader in extreme value by helping customers 'Live BIG and Save LOTS'. With the Court relief we have received today and the support of our lenders, we look forward to moving through this process and emerging as a stronger, more-efficient company, well-positioned to serve our customers. We thank our associates, customers, vendors, and all of our stakeholders for their continued support as we work to achieve Big Lots' full potential."

Big Lots' Restructuring and Sale Process

As announced on September 9, 2024, Big Lots entered into a sale agreement with Nexus, which agreed to acquire substantially all of the Company's assets and ongoing business operations. To facilitate the transaction, the Company, together with each of its subsidiaries, initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.

Under the terms of the sale agreement, Nexus will serve as the "stalking horse bidder" in a court-supervised auction process pursuant to section 363 of the U.S. Bankruptcy Code. Accordingly, the proposed transaction is subject to higher or otherwise better offers, Court approval, and other conditions. Under the Sale Agreement, if Nexus is deemed the winning bidder, the parties anticipate closing the transaction during the fourth quarter of 2024.

Additional Information About the Restructuring and Sale Process

Additional information regarding the Company's restructuring and sale process is available at a dedicated website, bigstepforbiglots.com. Court filings and other information related to the proceedings, including how to file a proof of claim, are available on a separate website administrated by the Company's claims agent, Kroll Restructuring Administration LLC, at https://cases.ra.kroll.com/biglots, by calling toll-free at (844) 217-1398 (or +1 (646) 809-2073 for calls originating outside of the U.S. or Canada), or by sending an email to biglotsinfo@ra.kroll.com.

Advisors

Davis Polk & Wardwell LLP is serving as legal counsel, Guggenheim Securities, LLC is serving as financial advisor, AlixPartners LLP is serving as restructuring advisor, and A&G Real Estate Partners is serving as real estate advisor to the Company. Kirkland & Ellis is serving as legal counsel to Nexus.

About Big Lots, Inc.

Big Lots is one of the nation's largest closeout retailers focused on extreme value. The Company is dedicated to being the big difference for a better life by delivering bargains to brag about on everything for the home, including furniture, décor, pantry and more. It fulfills its mission to help customers "Live BIG and Save LOTS" with sourcing strategies to grow extreme bargains through closeouts, liquidations, overstocks, private labels, and value-engineered products. The Big Lots Foundation, together with the Company's customers, associates, and vendors, has delivered more than $176 million of philanthropic support to critical needs in hunger, housing, healthcare, and education. For more information, to shop online, or to find a store near you, please visit biglots.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words "anticipate, "estimate," "continue," "could," "approximate," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "outlook" and similar expressions generally identify forward-looking statements. Similarly, descriptions of our objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are and will be based upon management's then-current views and assumptions regarding future events and operating performance and are applicable only as of the dates of such statements. Although we believe the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of our knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect business, financial condition, results of operations or liquidity.

Forward-looking statements that we make herein and in other reports and releases are not guarantees of future performance and actual results may differ materially from those discussed in such forward-looking statements as a result of various factors, including, but not limited to, the current economic and credit conditions, inflation, the cost of goods, our inability to successfully execute strategic initiatives, competitive pressures, economic pressures on our customers and us, the availability of brand name closeout merchandise, trade restrictions, freight costs, the risks discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, and other factors discussed from time to time in other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This release should be read in conjunction with such filings, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forward-looking statements.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

Media Contact:
Aaron Palash / Richard M. Goldman
Joele Frank, Wilkinson Brimmer Katcher
BigLotsMedia@joelefrank.com
212-355-4449

Investor Contact:
Alvin Concepcion
Investor_Relations@biglots.com
614-278-2705

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SOURCE Big Lots, Inc.

FAQ

What financing did Big Lots (BIG) receive interim approval to access?

Interim approval allows Big Lots to access a portion of its $707.5 million postpetition debtor-in-possession financing.

Will Big Lots continue paying employees and vendors during Chapter 11?

Yes; the interim Court relief permits continued payment of employee wages, benefits, and certain critical vendors in the ordinary course.

Who is buying Big Lots (BIG) under the announced sale agreement?

An affiliate of Nexus Capital Management LP is the stalking-horse bidder under the September 9, 2024 sale agreement.

When is the Court scheduled to consider Big Lots' final relief requests?

A "second day" hearing to consider final relief is scheduled for October 9, 2024 at 1:00pm ET.

Is the sale of Big Lots (BIG) to Nexus final?

No; the sale is subject to higher or better offers, Court approval, and other closing conditions before a potential Q4 2024 close.

Where can creditors find court filings and claims information for Big Lots (BIG)?

Court filings and claims information are available at https://cases.ra.kroll.com/biglots and via the claims agent contact details provided by the company.