The Great Atlantic & Pacific Tea Company (better known as A&P) has announced that is has voluntarily filed for Chapter 11 reorganisation in an effort to facilitate the financial and operational restructuring of the company, according to a press release.
As part of the move, A&P will have access to US$800m in DIP (debtor-in-possession) financing, provided by JPMorgan Chase, which will enable the business to continue paying local suppliers, vendors, employees and others in the normal course of business.
All of the retailer’s stores in eight eastern states will remain fully stocked and open for business, and all existing customer promotional and customer loyalty programmes will stay in place.
“We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring,” A&P president and CEO Sam Martin said in a company statement.
“While we have made substantial progress on the operational and merchandising aspects of our turnaround plan, we concluded that we could not complete our turnaround without availing ourselves of Chapter 11. It will allow us to restructure our debt, reduce our structural costs, and address our legacy issues.
“With the protections afforded by the Bankruptcy Code and the backing of a new, pre-eminent lender, we can make strategic decisions that will benefit the company over the long term, enabling A&P to emerge with a new capital structure and in a much improved position to exploit its fundamental strengths,” Mr Martin continued.
“Importantly, during this reorganization our stores will operate normally with fully stocked shelves and the excellent service A&P customers expect. Our customers can shop our stores with confidence, and our employees can continue delivering great value and service to our customers every day.”
Founded in 1859, A&P is one of the first supermarket chains to operate in the US.
The company operates 395 stores in eight states and the District of Columbia under the following names: A&P, Waldbaum’s, Pathmark, Best Cellars, The Food Emporium, Super Fresh and Food Basics.
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