New financing helps A&P emerge from bankruptcy

MONTVALE, N.J. — A&P will be able to emerge from chapter 11 next year, thanks to an agreement to receive $490 million of debt and equity financing from private investors comprised of The Yucaipa Companies LLC, Mount Kellett Capital Management LP and investment funds managed by Goldman Sachs Asset Management L.P., the company announced Friday. The agreement is subject to approval of the U.S. Bankruptcy Court for the Southern District of New York.

The investment will form the basis of A&P’s plan of reorganization, which the company said it anticipates filing prior to Nov.14.

“This investment commitment is a very important step in A&P’s financial and operational turnaround,” said A&P’s president and CEOr Sam Martin. “It positions us for a bright future with solid financial backing from sophisticated investors who know our company and industry well, and who also share our vision for A&P’s future.”

Martin continued: “We have been working diligently over the last year to execute a successful turnaround at A&P by enhancing the value and in-store experience we provide to our customers and by successfully driving substantial efficiencies across our operations and supply chain to reduce our cost structure. Going forward, these investors are committed to supporting further operational and service improvements. With this fresh capital investment and the court’s approval of our plan of reorganization, we anticipate emerging from chapter 11 early next year in a much stronger competitive and financial position.”

A&P filed for bankruptcy in December 2010 after years of battling hefty debt and intense competition. At the time, the grocer was reported to havetotal debts of more than $3.2 billion and assets of roughly $2.5 billion.

A&P said will be a private entity when it emerges from bankruptcy in 2012.