Kroger Co. is looking to give a billion dollar boost to its underfunded benefit plans, having set plans in motion to issue debt to pay for its pension liability.
The retailer said in a regulatory filing that the addition will not change its overall balance sheet obligations, as noted by Reuters, stating that contributions to the plan are "strategic opportunities" thanks to both the current interest rate environment and potential changes to the U.S. tax code.
The retailer has made several moves to shift and grow within a competitive market over the last year. Amongst these is a strategy to cut costs and compete in pricing, as well as having expanded its reach when it bought out Marsh Stores last month.
The retailer said this latest investment would incur a one-time expense following the settlement, but noted that the expense would not affect its 2017 earnings forecast. Certain benefit balances of the fund could be transferred to other retirement plan options or a lump sum payout. Reuters also reported that Kroger had a total debt of $13.44 billion as of May 20.
Is this just one step in the Ohio-based retailer’s plans for growth? Deli Market News will report as soon as we know.