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.