A&P attracts major investors
Montvale, N.J. Great Atlantic & Pacific Tea Co. said two private companies will invest $175 million in the grocer, to increase liquidity and strengthen the balance sheet.
Yucaipa will invest $115 million and Tengelmann Warenhandelsgesellschaft KG will invest $60 million for the purchase of convertible preferred stock.
Tengelmann will remain the single largest shareholder in Great Atlantic with 38.6% stake while Yucaipa's ownership will increase to 27.6% the company said.
Yucaipa also will get the right to nominate two directors to Great Atlantic's board.
The deal is conditioned upon the issue of $225 million senior secured notes due 2015 that Great Atlantic announced separately on Thursday.
The company said it intends to use proceeds of the offering to repay debt.