LOS ANGELES -- To facilitate the merger of Food 4 Less Supermarkets and Ralphs Grocery Co., Yucaipa Cos. here has agreed to accept consents from only 50% of its bondholders rather than 80%, according to sources close to the deal.
the holders of $450 million worth of Ralphs' bonds must exchange their securities for notes in the new company, and the holders of $320 million worth of Food 4 Less bonds must consent to changes in their covenants that will allow them to trade their holdings -- for a fee -- for those in the new Ralphs.
The deadline for exchanges and consents has been extended at least three times since the original deadline of Feb. 23.
Food 4 Less already has lined up a $750 million term loan from a group of banks and anticipates raising another $400 million from the offering of new notes to present bondholders.
However, if all bonds are not exchanged, Yucaipa might have to raise more than $400 million to complete financing on the deal, industry sources said.