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In an effort to calm some shareholder fears, the Great Atlantic & Pacific Tea Co., Inc. said this week that its balance sheet and liquidity were unaffected by the Sept. 15 bankruptcy filing of Lehman Brothers Holdings, Inc. and certain of its subsidiaries, including Lehman Europe.
The grocer pointed out that Lehman isn't a party to the A&P's indebtedness under its revolving credit agreement with Bank of America N.A. or its senior note obligations. Availability under the revolving credit agreement was about $160 million at the end of the second quarter ended Sept. 6, 2008 and there are no financial covenants under the A&P's loan agreements.
Additionally, Lehman Europe is party to a 3.2 million share lending agreement with the A&P entered into in relation to the grocer's convertible note financings in December 2007. However, A&P said that until it has further information on the bankruptcy proceedings involving Lehman and Lehman Europe and can properly assess whether Lehman Europe will be able to fulfill its obligation to return the borrowed shares, the grocer will continue to consider the shares outstanding for corporate law purposes only, and not for the purpose of computing and reporting per share results.
A&P operates 446 stores in eight states and the District of Columbia under A&P, Waldbaum's, Pathmark, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh, and Food Basics banners.