Court Approves A&P’s $800 Million DIP Facility

The Great Atlantic & Pacific Tea Company, Inc. (A&P) (NYSE: GAP) announced today that the U.S. Bankruptcy Court for the Southern District of New York has approved the Company’s $800 million Debtor-in-Possession (DIP) financing provided by JPMorgan Chase & Co. Of the total DIP facility, a $350 million term loan will be immediately funded.

The Company also announced that the Court had granted A&P’s motion to approve its request for “first day orders,” including:

Immediate authority to pay employees’ salaries and wages and to continue providing health and other employee benefits to them;
Authority to pay certain pre-petition obligations to critical vendors and suppliers in the ordinary course; and
Authority to continue to satisfy all of its pre-petition obligations to customers, including existing loyalty and promotional programs.

The Court also entered various other orders to ensure that the Company has the ability to operate smoothly during the Chapter 11 process.

A&P continues to conduct its business and serve customers at its 395 stores. The Company’s stores are fully stocked with their complete range of high quality products, and all existing customer promotional and customer loyalty programs will stay in place.

A&P announced on December 12 that voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code have been filed with the U.S. Bankruptcy Court for the Southern District of New York to restructure the Company’s debt and reorganize the business.

About A&P

Founded in 1859, A&P is one of the nation’s first supermarket chains. 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.

This release contains forward-looking statements about the future performance of the Company, which are based on management's assumptions and beliefs in light of the information currently available to it. The Company assumes no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: the ability to timely and effectively implement the turnaround strategy; the ability to access capital and capitalize on unencumbered and under-encumbered assets; the ability to enter into sale-leaseback transactions or sell non-core assets; various operating factors and general economic conditions; competitive practices and pricing in the food industry generally and particularly in the Company's principal geographic markets; the Company's relationships with its employees and the terms of future collective bargaining agreements; certain actions may require Bankruptcy Court approval; the risk that the bankruptcy filing and the related cases disrupt the Company’s current plans and operations; the costs and other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; capital market conditions that may negatively affect the Company's cost of capital and the ability of the Company to access capital; availability of capital to the Company; supply or quality control problems with the Company's vendors; and changes in economic conditions that may affect the buying patterns of the Company's customers.

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