A&P Plans to Emerge from Bankruptcy

Great Atlantic & Pacific Tea Co., once the Unites States’ largest supermarket owner, has lined up $490 million in financing for its plans to emerge from bankruptcy as a private company, Reuters reported Friday. The debt and equity financing will come from Yucaipa Cos, an investment vehicle of billionaire Ron Burkle; Goldman Sachs Asset Management; and Mount Kellett Capital Management.

(Reuters) – The Great Atlantic & Pacific Tea Co Inc , once the largest U.S. supermarket operator, said on Thursday it lined up $490 million of financing to enable it to emerge from bankruptcy protection as a private company early next year.

The debt and equity financing will come from Yucaipa Cos, an investment vehicle of billionaire Ron Burkle; Goldman Sachs Asset Management LP; and Mount Kellett Capital Management LP, an investor in distressed companies with offices in New York, Hong Kong, London and Mumbai.

A&P, as the Montvale, New Jersey-based grocer is known, said it plans to file a Chapter 11 reorganization plan before Nov. 14 to reflect the new financing and keep its 336 stores in seven U.S. states open while in bankruptcy.

The investment provides “solid financial backing from sophisticated investors who know our company and industry well, and who also share our vision for A&P’s future,” Chief Executive Sam Martin said in a statement.

A&P did not immediately return a call seeking additional comment.

Founded in 1859, A&P filed for bankruptcy protection last Dec. 12 after struggling with too much debt and competition from retailers such as Costco Wholesale Corp and Wal-Mart Stores Inc.

A&P’s stores also include Food Emporium, Pathmark, Superfresh and Waldbaum’s, as well as its namesake stores. It said it employs about 39,000 people. The company once operated more than 15,000 stores.

The investment and the reorganization plan require approval by U.S. Bankruptcy Judge Robert Drain in White Plains, New York.

The case is In re: The Great Atlantic & Pacific Tea Co, U.S. Bankruptcy Court, Southern District of New York, No. 10-24549.