Southeastern Grocers Announces Pricing of Notes Offering

JACKSONVILLE, Fla.–(BUSINESS WIRE)–Southeastern Grocers, Inc. (SEG) today announced that its indirect wholly-owned subsidiaries SEG Holding, LLC and SEG Finance Corp. have priced an offering of $325.0 million aggregate principal amount of 5.625% Senior Secured Notes due 2028 (the “Notes”). The Notes will be issued at an issue price of 100%. Interest on the Notes will accrue at a rate of 5.625% per annum, and will be payable semi-annually in arrears on every April 15 and October 15, commencing April 15, 2021. The offering of the Notes is expected to close on October 9, 2020, subject to customary closing conditions.

The Notes will be fully and unconditionally guaranteed by the subsidiaries of SEG that guarantee its existing asset-based revolving credit facility (the “Revolving Credit Facility”). The proceeds from the offering of the Notes, together with cash on hand and drawings under the Revolving Credit Facility, are intended to be used to repay in full the amounts outstanding under, and cancel, the group’s existing Term Loan Facility, with the balance to be used to pay transaction fees and expenses related to the repayment of the Term Loan Facility and the issuance of the Notes.

The Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or under any state securities law, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes were offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A and outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act.

This announcement shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Southeastern Grocers

Southeastern Grocers, Inc. (SEG), parent company and home of BI-LO, Fresco y Más, Harveys Supermarket and Winn-Dixie grocery stores, is one of the largest conventional supermarket companies in the U.S. SEG grocery stores, liquor stores and in-store pharmacies serve communities throughout the seven southeastern states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina. BI-LO, Fresco y Más, Harveys Supermarket and Winn-Dixie are well-known and well-respected regional brands with deep heritages, strong neighborhood ties, proud histories of giving back, talented and caring associates and strong commitments to providing the best possible quality and value to customers.

Cautionary Statements Regarding Forward-Looking Information

This press release contains certain forward-looking statements regarding SEG, including, but not limited to, its financial condition, prospects and its results of operations. All of these statements are based on estimates, projections and assumptions prepared by management that are inherently uncertain and that may not be realized as fact. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental, and technological factors outside of SEG’s control, that may cause SEG’s business, industry, strategy, or actual results to differ materially. SEG undertakes no obligation to update or revise any of the forward looking statements contained herein, whether as a result of new information, future events or otherwise. Forward-looking statements may include words such as “anticipate,” “intend,” “plan,” “seek,” “believe,” “estimate,” “expect,” and similar references to future periods and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events but not all forward-looking statements contain these identifying words.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: adverse economic conditions; the impact of the COVID-19 pandemic on our business; failure to successfully execute our strategic initiatives; the competitive nature of the industry in which we conduct our business; our inability to timely identify or respond to customer trends; significant changes to our relationship with C&S Wholesale Grocers (“C&S”); disruptions to our product supply or to C&S’s distribution network; our inability to maintain the services of key personnel and failure to attract, train and retain qualified staff; risks associated with providing pharmacy services at our stores; our inability to open, relocate or remodel stores on schedule; increases or fluctuations in our operating costs; increase in marketing, advertising and promotional costs and inability to implement effective marketing, advertising and promotional strategies; failure to maintain our reputation and the value of our brands, including protection of our intellectual property; risks associated with leasing substantial amounts of space, including liability under our operating leases assigned to third parties; impairment expenses on the value of our long-lived assets; risks related to the adoption of fresh start accounting; changes in accounting standards, subjective assumptions, estimates and judgements by management related to complex accounting matters; failure to maintain the privacy and security of confidential customer and business information; disruptions of or compromises to our information technology system; a loss in customer confidence in the safety and quality of our products; our inability to retain the loyalty of our customers; unanticipated changes in the insurance market or factors affecting self-insurance reserve estimates; results of any ongoing litigation or legal proceedings in which we are involved or in which we may become involved; changes in laws, rules and regulations affecting our industry; the geographic concentration of our locations, which makes us vulnerable to severe storm damage, natural disasters and other local adverse weather conditions; threats or potential threats to security of food and drug safety, the occurrence of a widespread health epidemic and/or pandemic or other incidents beyond our control; attempts to unionize our employees; the seasonality of our business; and to utilize a significant portion of our NOLs or other tax attributes.