Big Lots (NYSE:BIG) announced on Wednesday that it has entered into a sale and leaseback agreement with affiliates of Blue Owl Capital relating to the company’s distribution center in Apple Valley, California, and 26 owned store locations.
The retailer said the sale and leaseback transaction is scheduled to close within 45 days. The transaction is subject to the usual continued due diligence, final documentation, and other closing conditions.
Gross proceeds from the transaction are expected to be $318M. After backing out expenses and taxes, Big Lots (BIG) expects to receive estimated net proceeds of approximately $310M.
Looking ahead, Big Lots (BIG) intends to use $100M of the net proceeds from the sale and leaseback transaction to fully pay down its synthetic lease on the Apple Valley distribution center. The Big Lots (BIG) plan is for the remainder of the net proceeds to go toward paying down debt on the asset-based lending revolving credit facility.
“We are highly focused on ensuring we have plenty of liquidity to get through this period of macroeconomic challenges, and monetizing these assets is a significant step forward in ensuring such liquidity,” stated CEO Bruce Thorn.
Shares of Big Lots (BIG) gained 4.05% in premarket trading on Wednesday. The retail stock still has one of the highest levels of short interest outstanding on it, despite falling more than 38% on a year-to-date basis.