Orchard Supply Hardware Receives Approval for $177 Million in DIP Financing

Orchard Supply Hardware Receives Approval for $177 Million in DIP Financing

SAN JOSE, Calif.--(BUSINESS WIRE)-- Orchard Supply Hardware Stores (OTCPINK:OSHWQ and OTCPINK:OSHQE), a neighborhood hardware and garden store focused on paint, repair and the backyard, today announced that the United States Bankruptcy Court for the District of Delaware has given final approval for the Company to access $177 million in debtor in-possession ("DIP") financing provided by Wells Fargo Bank, the Company's existing ABL Lender, and its Term Loan Lenders.

This financing, in addition to Orchard's ongoing cash flow, will ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case. The Court previously had given interim approval for the DIP financing agreement on June 19, 2013.

"We appreciate the Court's careful consideration and approval of our DIP financing, which is critical to maintaining our normal operations during the Chapter 11 process" said Mark Baker, Orchard President and Chief Executive Officer. "Our suppliers, customers and associates have been tremendously supportive, and we look forward to our sale hearing at the end of August."

As announced on June 17, 2013, Orchard has reached an agreement through which Lowe's Companies, Inc. will acquire the majority of its assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Under the terms of this agreement, Orchard will operate as a separate, standalone business at the completion of the sale process, retaining its brand, management team and associates.

To facilitate the sale and restructure its balance sheet, Orchard filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The agreement with Lowe's comprises the initial stalking horse bid in the Court-supervised auction process under Section 363 of the Bankruptcy Code.

On July 8, 2013, the Court approved bidding procedures establishing August 9, 2013, as the deadline by which any competing offers for the Company's assets must be received. If the Company receives any qualifying bids in advance of this deadline, an auction will be held on August 14, 2013. The final sale hearing has been scheduled for August 20, 2013.

Orchard's customers and suppliers can access additional information about the Company's Chapter 11 filing on its dedicated website, www.OrchardRestructuring.com. Orchard also has established a supplier support center, which may be reached at 855-529-6819 or suppliers@osh.com.

Orchard is advised in this financial restructuring by Moelis & Company, FTI Consulting, and DLA Piper.

About Orchard Supply Hardware

Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. The Company was founded as a purchasing cooperative in San Jose in 1931. Today the stores average approximately 36,000 square feet of interior selling space and 8,000 square feet of exterior nursery and garden space. As of June 16, 2013 the Company has 89 stores in California and two stores in Oregon. For more information, visit http://osh.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the Company's management. Words such as "guidance", "outlook", "believes", "expects", "appears", "may", "will", "should", "intend", "target", "projects", "estimates", "plans", "forecast", "is likely to", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact and other estimates, projections, future trends and the outcome of events that have not yet occurred referenced in this press release, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, factors discussed under the section entitled "Risk Factors" in the Company's reports filed with the Securities and Exchange Commission, the ability to conclude the transaction with Lowe's or another bidder in the Court-supervised auction process under Section 363 of the Bankruptcy Code and the challenges and risks associated with operating the business under Chapter 11 protection. Many of such factors relate to events and circumstances that are beyond the Company's control. You should not place undue reliance on forward-looking statements. The Company does not assume any obligation to update the information contained in this press release.

Orchard Media:
Shannon Pritchett, 212-850-5755
FTI Consulting
Orchard Investor:
Matt Gross, 212-850-5659
FTI Consulting

KEYWORDS:   United States  California


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