A&P Receives $490 Million Commitment to Sponsor Plan of Reorganization

The Great Atlantic & Pacific Tea Company announced it has entered into 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 agreement is subject to approval of the U.S. Bankruptcy Court for the Southern District of New York. 

The agreement with these investors will enable A&P to complete the restructuring of its balance sheet and emerge from Chapter 11 as a private entity in early 2012.  The investment will form the basis of A&P's plan of reorganization, which the Company anticipates filing prior to November 14.

"This investment commitment is a very important step in A&P's financial and operational turnaround," said A&P's President and Chief Executive Officer 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."

Mr. 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."

Following the closing of the transaction and the Company's emergence from Chapter 11, A&P's current Board of Directors will be dissolved, and a new Board of Directors will be appointed in accordance with the terms of the plan of reorganization.

During the Company's exit process, A&P intends to continue to operate its stores normally with the excellent products and service customers expect.  

A&P and its subsidiaries filed voluntary Chapter 11 petitions on December 12, 2010.