Nov. 4, 2009 (Business Wire) -- The Penn Traffic Company (Pink Sheets: PTFC), entered into a forbearance agreement with all of its senior working capital lenders and General Electric Capital Corporation ("GE Capital"), as agent for the lenders, on November 3, 2009.
“We continue to work closely with our lenders and appreciate the flexibility that they have provided us with this latest agreement,” said President and Chief Executive Officer Gregory J. Young.
The company currently expects that, under the terms of the forbearance agreement, the participating lenders will continue to provide letters of credit and other forms of credit to the company through at least November 25, 2009. This forbearance agreement was necessitated by GE Capital’s notification on October 30, 2009 that Penn Traffic was in technical default of certain provisions of its current credit agreements.
In connection with the forbearance agreement, Penn Traffic’s board of directors has retained Ronald F. Stengel, senior managing director with the firm of Conway Del Genio Gries & Co., LLC, as Penn Traffic’s chief restructuring officer, effective immediately. His firm has worked with Penn Traffic on a variety of matters, including extensive financial advisory services from 2006 through 2008.
Penn Traffic’s procurement partner for most categories represented in the company’s retail stores, C&S Wholesale Grocers Inc., has been notified of these developments and is expected to continue providing its services to Penn Traffic without interruption.
About Penn Traffic
The Penn Traffic Company owns and operates supermarkets under the P&C, Quality and BiLo trade names in Upstate New York, Pennsylvania, Vermont and New Hampshire. Headquartered in Syracuse, N.Y., Penn Traffic’s conventional supermarkets offer value pricing, fresh and local products, and full-service stores in convenient neighborhood locations. The regional retailer’s P&C Fresh supermarkets combine all the features of conventional-format stores with gourmet, premium and store-made fresh products, as well as ready-to-eat foods, easy-to prepare meals and expanded natural and organic product offerings. Retail supermarkets and consumers became Penn Traffic’s primary focus with the sale of its wholesale business segment during fiscal 2009. More information on the company may be found at www.penntraffic.com.
Forward Looking Statements
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, reflecting management’s current analysis and expectations, based on what management believes to be reasonable assumptions. These forward-looking statements include statements relating to our anticipated financial performance and business prospects.
