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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2018

 

 

Albertsons Companies, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   333-205546   47-5579477

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

250 Parkcenter Blvd, Boise, ID   83706
(Address of Principal Executive Offices)   (Zip Code)

(208) 395-6200

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01 Regulation FD.

As previously announced by Albertsons Companies, Inc. (the “Company”) on July 20, 2018, outside counsel to the Company received a letter (the “Original Minority Holders’ Letter”) from a law firm purporting to represent in excess of 45% of the outstanding principal amount of the 7.25% Senior Debentures due February 2031 (the “2031 Safeway Notes”) issued by the Company’s wholly-owned subsidiary, Safeway Inc. (“Safeway”). On July 23, 2018, the Company and Safeway responded to the Original Minority Holders’ Letter. A copy of the Company’s initial response letter was previously furnished as Exhibit 99.1 with the Company’s Current Report on Form 8-K dated July 23, 2018. On October 16, 2018, the Company received a second letter (the “Second Minority Holders’ Letter”) from the same law firm which then purported to represent approximately 48.6% of the outstanding principal amount of the 2031 Safeway Notes. On October 22, 2018, the Company and Safeway responded to the Second Minority Holders’ Letter. A copy of the Company’s second response letter was previously furnished as Exhibit 99.1 with the Company’s Current Report on Form 8-K dated October 23, 2018.

On October 25, 2018, the Company received a third letter (the “Third Minority Holders’ Letter”). On October 26, 2018, the Company and Safeway responded to the Third Minority Holders’ Letter. A copy of the Company’s third response letter is attached as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Item 7.01 and in Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits

 

99.1    Third Response Letter


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

Albertsons Companies, Inc.

(Registrant)

October 26, 2018     By:  

/s/ Robert A. Gordon

    Name:   Robert A. Gordon
    Title:   Executive Vice President and General Counsel
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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

 

Stuart Freedman       Writer’s E-mail Address
212.756.2407       [email protected]

October 26, 2018

VIA FEDEX

Counsel for the Trustee under the Indenture

Emmet, Marvin & Martin, LLP

120 Broadway 32nd Floor

Attention: Elizabeth M. Clark, Esq.

With a copy to:

Counsel for Certain Holders

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019

Attention: Lawrence G. Wee, Esq.

 

  Re:

Safeway Inc.s 7.25% Debentures due 2031

Ladies and Gentlemen:

We are counsel to Albertsons Companies, Inc. (“Albertsons”) and its wholly-owned subsidiary, Safeway Inc. (“Safeway”). We write in reference to (i) the letter, dated July 19, 2018, of Lawrence G. Wee (the “First Wee Letter”) on behalf of holders of “more than 45% of the aggregate principal amount” (the “Minority Holders”) of Safeway’s 7.25% Debentures due 2031 (the “Debentures”), (ii) our letter written in response to the First Wee Letter, dated July 23, 2018 (the “First Response Letter”), (iii) the letter, dated October 16, 2018, of Lawrence G. Wee (the “Second Wee Letter”) on behalf of the Minority Holders who now beneficially own “approximately 48.6% of the outstanding Debentures,” (iv) our letter written in response to the Second Wee Letter, dated October 22, 2018 (the “Second Response Letter”), and (v) the letter, dated October 25, 2018, of Lawrence G. Wee (the “Third Wee Letter”) on behalf of the Minority Holders.1

 

1 

Capitalized terms used herein but not otherwise defined in this letter shall have the meanings ascribed to them in the Indenture, the First Response Letter, or the Second Response Letter.


Emmet, Marvin & Martin, LLP

Paul, Weiss, Rifkind, Wharton & Garrison LLP

October 26, 2018

Page 2

 

We note that the Third Wee Letter—like the Second Wee Letter—adds nothing to the Minority Holders’ unsupported claims of default asserted in the First Wee Letter. In their most recent letter, the Minority Holders again assert, without providing any specifics, that Safeway’s comprehensive responses to their claims of default set forth in the First Response Letter were somehow deficient. They were not. In the Second Response Letter, we pointed out that the Minority Holders have yet to explain how Safeway’s responses were in any way lacking. The Third Wee Letter fails in that regard as well.

In the Third Wee Letter, the Minority Holders assert that Safeway’s pending refinancing transactions (the “Refinancing Transactions”) caused them to renew their claims. (Third Wee Letter at 2.) Specifically, the Minority Holders “maintain that, similar to the incurrence of the 2015 Liens securing the indebtedness under the Albertsons[/Safeway] Credit Agreements without equally and ratably securing the Debentures, the Refinancing Transactions and the Liens securing Indebtedness being incurred in the Refinancing Transactions will constitute further defaults under the Indenture governing the Debentures … .” (Id.)

That assertion is incorrect. Safeway’s refinanced term loans under the Albertsons/Safeway Term Loan Agreement will be secured by the same liens that secure Safeway’s existing term loans under the Albertsons/Safeway Term Loan Agreement. Further, concurrently with the consummation of the Refinancing Transactions, Safeway will use balance sheet cash to repay a significant amount of Safeway’s outstanding Indebtedness under the Albertsons/Safeway Term Loan Agreement, which would benefit the Minority Holders, as reflected in Standard & Poors’ increased recovery assessment for all series of the Safeway notes. (S&P Global Ratings Recovery Report: Albertsons Cos. Inc.’s Recovery Rating Profile, dated October 22, 2018.)

The Minority Holders’ contention that Albertsons’ disclosure of the Refinancing Transactions is what caused them to resurface, after months of silence, is simply a subterfuge for their opportunism. As noted above, the Refinancing Transactions improve the credit quality of the Debentures. Despite that fact, the Minority Holders have asserted a demand for make whole payments, based on 2015 interest rates, for the incurrence of secured debt in 2015, that they did not object to at that time or in the three and a half years that followed—all the while accepting payments of interest on the Debentures.

Finally, we note that the Minority Holders suggest that the holders of Safeway’s 7.45% Senior Debentures due 2027 (the “2027 Debentures”) could make similar arguments as to those debentures as the Minority Holders did in the First Wee Letter. However, any such claims would be deficient for the reasons set forth in the First Response Letter. Moreover, the Minority Holders do not contend that they hold the 2027 Debentures. Accordingly, the Minority Holders have no standing to assert claims relating to the 2027 Debentures, and their assertions with respect to them only serve to further demonstrate that their true motive is to pressure Safeway to pay them a make whole to which they are not entitled.


Emmet, Marvin & Martin, LLP

Paul, Weiss, Rifkind, Wharton & Garrison LLP

October 26, 2018

Page 3

 

Safeway reserves all of its rights and remedies in connection with the Debentures and the Minority Holders’ continued efforts to contrive an Event of Default.

[Signature Page Follows]


Emmet, Marvin & Martin, LLP

Paul, Weiss, Rifkind, Wharton & Garrison LLP

October 26, 2018

Page 4

 

Sincerely,
/s/ Stuart D. Freedman
Stuart D. Freedman

 

cc:

Robert A. Gordon, Albertsons Companies, Inc.

Ronald B. Risdon, Schulte Roth & Zabel LLP

Michael E. Swartz, Schulte Roth & Zabel LLP

Antonio L. Diaz-Albertini, Schulte Roth & Zabel LLP

Yolanda Ash

The Bank of New York Mellon Corporate Trust

2 North LaSalle Street, Suite 700

Chicago, IL 60602

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