Recapitalization also eliminates $500 million in debt

ST. LOUIS — Discount grocer Save A Lot has completed debt-for-equity and debt-for-debt exchanges that eliminated $500 million in debt and provided an infusion of $350 million in new capital, the company said on Friday. The retailer said the new capital, from a combination of new and existing lenders, will support its operations and the acceleration of its transformation plan.

“With the completion of this recapitalization, we are moving forward with a substantially stronger financial foundation as we continue serving our customers and executing our transformation plan,” Save A Lot CEO Kenneth McGrath said in a statement. “Our ability to achieve this outcome through a fully consensual and out-of-court agreement is a significant achievement and reflects the confidence of our new owners and lenders in our business model and long-term growth prospects. We thank our vendors and retail partners for their trust and support throughout this process and we look forward to continuing to work closely with them into the future.”

Save A Lot last month said it would add 1,000 or more jobs in its retail and distribution centers to deal with surging demand caused by the COVID-19 pandemic. In his statement on Friday, McGrath gave a shout out to the company’s workers.

“As our nation is impacted by the COVID-19 pandemic, I cannot say enough about the strength and resilience of our retail partners and our team members,” McGrath said. “These incredible people are on the front lines every day, and we thank them for their unwavering dedication to serving our customers and helping our communities manage through this unprecedented situation. We understand the critical role our company plays as our communities rely on us now more than ever to provide food and other essential, high quality products at low prices.”

Founded in 1977, Save A Lot currently operates more than 1,100 corporate and licensed stores in 33 states and 14 wholesale distribution centers. The Canadian private equity firm Onex bought Save-A-Lot from Supervalu Inc in 2016 for about $1.4 billion.