Winn-Dixie emerges from Chapter 11, closes on $725 million exit facility

By Caroline Salls

Pittsburgh, Nov. 21 - Winn-Dixie Stores, Inc. emerged from Chapter 11 bankruptcy when its plan of reorganization took effect Tuesday, according to a filing with the U.S. Bankruptcy Court for the Middle District of Florida.

The plan was confirmed on Nov. 9.

According to the filing, 54 million shares of new common stock will be issued under the plan on the initial distribution date to holders of allowed unsecured claims and to the common stock reserve on account of holders of disputed unsecured claims.

The initial distribution date for allowed unsecured claims will be no later than 45 days after the effective date, unless otherwise ordered by the court.

Winn-Dixie said the initial distribution date has not yet been established.

Once the company issues the new shares, they will trade under the symbol "WINN."

In accordance with the plan, the company's old common stock was cancelled effective Tuesday and holders of the old common stock will receive no distribution under the plan.

In conjunction with its emergence from Chapter 11, Winn-Dixie closed on its new $725 million exit financing facility provided by a consortium led by Wachovia Bank, according to a company news release.

The company said the financing will be available to support the company as it seeks to make significant investments in its current store base, to develop new stores and to take other actions to position the business to compete effectively in its markets over the next several years.

As previously reported, the exit facility priced at Libor plus 125 to 225 basis points, based on availability.

"We are exiting bankruptcy having achieved the restructuring objectives we set out when the company first filed its Chapter 11 petition in February 2005," chief executive officer and chairman of the board Peter Lynch said in the release.

"We have reduced our store footprint to focus on those markets in which we believe we are best positioned for success. We have strengthened our balance sheet through significant reduction in debt and asset sales.

"We have obtained $725 million in new financing to significantly improve our liquidity. And we have enhanced our operating cash flows through a combination of increased sales and expense reductions."

As previously reported, reorganized Winn-Dixie will authorize up to 150 million shares of new common stock.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Noteholder claimants will initially receive 62.69 shares of new common stock per $1,000 of claim and, on subsequent distribution dates, any excess new common stock held in reserve, for a recovery of 95.6%;

• Holders of landlord and vendor supply claims of $3,000 or more will receive either 46.26 shares of new common stock per $1,000 of claim, plus a share of remaining new common stock; or 67% of their claim in cash if they elect to reduce it to below $3,000;

• Holders of retirement plan claims will receive either 38.75 shares of new common stock per $1,000 of claim, plus any remaining new common stock; or 67% of their claim in cash if they elect to reduce it to below $3,000;

• Holders of other unsecured claims will receive either 34.89 shares of new common stock per $1,000 of claim, plus any remaining new common stock; or 67% of their claim in cash if they elect to reduce it to below $3,000;

• Holders of administrative claims, bond/letter-of-credit backed and priority claims will be paid in full;

• Secured claims may be reinstated, satisfied in deferred payment terms or paid in full, at the election of the company;

• Creditors with "small" claims under $3,000, including creditors who elect to reduce their claims to $3,000, will receive cash payments equal to 67% of the amount of their claims;

• Creditors with convenience claims under $100 will be paid in cash, in full; and

• Current equity holders and subordinated claimholders will receive no distribution.

New board of directors

In addition, a new board of directors was appointed on the effective date.

The new board includes Lynch; Evelyn V. Follit, director of Catalina Marketing Corp. and GetConnected, Inc.; Charles P. Garcia, president of the Sterling Hispanic Capital Markets Group at vFinance, Inc.; Jeffrey C. Girard, former vice chairman of finance and administration at Shopko Stores, Inc.; Yvonne R. Jackson, founder and president of BeecherJackson; Gregory P. Josefowicz, a director of PetSmart, Inc. and Ryerson, Inc.; Terry Peets, senior advisor to J.P. Morgan Partners and director of Berry Plastics, Inc., Pinnacle Foods Group, Inc., Ruiz Foods, Inc. and WKI Holding Co., Inc.; and Richard E. Rivera, president and chief executive officer of Rubicon Enterprises, LLC and a director of the National Restaurant Association.

Winn-Dixie, a Jacksonville, Fla., supermarket company, filed for Chapter 11 on Feb. 21, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. The case was later transferred to the U.S. Bankruptcy Court for the Middle District of Florida. Its Chapter 11 case number is 05-03817.

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