Judge approves auction procedure for Tesco subsidiary retailer
US supermarket chain Fresh and Easy Neighborhood Market Inc won approval in court of its scheduled Nov.19 auction. The Tesco owned retailer was in the process of being auctioned off with the lead bidder being an affiliate of Yucaipa Cos.
In a hearing held at Wilmington, DE, US Bankruptcy Judge Kevin J. Carey said the guidelines for the proposed sale submitted would be approved, as the plan would save nearly 4,000 employee jobs in the company.
All the interested buyers would need to submit an offer by November 15 and if there is a competing qualified bid, an auction would be undertaken. On November 21, there would be a hearing held to confirm the auction winner.
Under the proposal, an affiliate of Tesco would open a line of credit worth USD120 million to Yucaipa to help funding their acquisition. According to court documentation, Tesco would receive warrants on the debt at a value as much as 10% of equity in the reorganized retail chain. Fresh and Easy would then receive 22.5% of the equity of the new chain should the offer from Yucaipa come out as the best bid.