US department store chain Belk has entered into a restructuring support agreement (RSA) with its majority owner, Sycamore Partners, a private equity firm specialising in consumer, retail and distribution investments that holds over 75 per cent of its first lien term loan debt and cent per cent of its second lien term loan debt on a plan to recapitalise the business, significantly reduce debt by nearly $450 million and extend maturities on all term loans to July 2025.

Under the terms, Sycamore Partners will retain majority control of Belk. The retailer has received financing commitments for $225 million in new capital from Sycamore Partners, leading global investment firms KKR and Blackstone Credit, and certain existing first lien term lenders, who, along with and other participating lenders, will acquire a minority ownership in Belk.

Under the RSA, suppliers will be unimpaired and will continue to be paid in the ordinary course for all goods and services provided to the company. Belk plans to continue normal operations throughout its financial restructuring process, it said in a press release.

The new capital is expected to support Belk’s continued investment in strategic initiatives, including delivering a seamless omni-channel shopping experience and expanding Belk’s product offerings in home goods, outdoor and wellness segments.

Belk expects to complete the financial restructuring transaction through an expedited pre-packaged reorganisation under Chapter 11 of the US Bankruptcy Code by the end of February