Court Approves A&P's $800 Million Financing
MONTVALE, N.J. (AP) -- A New York court has approved $800 million in financing that will allow the Great Atlantic & Pacific Tea Co. to continue operating while under Chapter 11 bankruptcy protection.
Once the nation's biggest grocer, the company -- widely known as A&P -- filed for bankruptcy protection over the weekend.
A&P said late Monday that the U.S. Bankruptcy Court for the Southern District of New York approved $800 million in debtor-in-possession financing. A $350 million term loan will be immediately made available. The company had indicated in a filing on Sunday that it had secured the financing through J.P. Morgan Chase & Co.
The court also approved several orders, including one that allows the Montvale, N.J.-based company to continue to pay workers' salaries and wages and continue to provide health and other benefits.
A&P, a 151-year-old company, runs 395 stores around the Northeast under the A&P, Waldbaum's, The Food Emporium, Super Fresh, Pathmark and Food Basics grocery stores banners.
Its bankruptcy filing did not come as much of a surprise, as the company has been losing money for some time. A&P listed total debts of more than $3.2 billion and assets of about $2.5 billion in a filing submitted late Sunday.
The company said it is continuing to run its business as normal and serve customers at all of its stores. A&P plans to continue to focus on its turnaround plan while under bankruptcy protection. It has brought in new management, sold 32 underperforming stores since this summer and drastically cut costs. The grocer said it could not complete this process without the protection.
A&P is one of the oldest supermarket operators in the country. Its first store was in New York City and sold tea, coffee and spices. It expanded across the nation and by the 1930s was the largest grocer in the country.
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