New Capital Significantly Strengthens A&P and Brings Together Two
Prolific Investors in the Supermarket Industry
A&P to Accelerate Format Optimization, Business Improvement
Initiatives and Pathmark Turnaround
Company Elects Two New Directors
The Great Atlantic & Pacific Tea Company, Inc. (A&P) (NYSE:GAP)
announced today that affiliates of The Yucaipa Companies LLC (“Yucaipa”)
invested $115 million in A&P by purchasing 115,000 shares of A&P’s newly
created 8.0% Cumulative Convertible Preferred Stock, Series A-Y pursuant
to an investment agreement executed among Yucaipa and A&P dated as of
July 23, 2009. In addition, partners of Tengelmann
Warenhandelsgesellschaft KG (“Tengelmann”) invested $60 million in A&P
by purchasing 60,000 shares of A&P’s newly created 8.0% Cumulative
Convertible Preferred Stock, Series A-T pursuant to an investment
agreement executed among partners of Tengelmann and A&P dated as of July
23, 2009. A total of $175 million was invested in A&P pursuant to a
private offering. At the same time, A&P announced today the completion
of its previously announced offering of $260 million of 11.375% senior
secured notes due 2015 (the “Notes”), successfully accomplishing a fund
raising effort resulting in gross proceeds to the Company of $435
million.
The injection of $175 million of equity capital, combined with raising
$260 million through the issuance of the Notes, significantly
strengthens A&P’s balance sheet and provides additional liquidity for
the Company to pay down a portion of its senior credit facility and
compete in the dynamic food retail industry.
The equity investments bring together two of the most prolific investors
in the US grocery retail industry: Tengelmann, one of the world’s
largest family owned operators of diversified retail businesses
comprising global revenues in excess of $35 billion; and Yucaipa, one of
the most successful investors in the US supermarket industry in the last
15 years. Together they will provide A&P with unparalleled knowledge,
resources and expertise in this difficult environment. This relationship
is expected to enable A&P to accelerate its format optimization
strategy, drive the implementation of its business improvement
initiatives and facilitate the turnaround of its Pathmark business.
