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SYRACUSE, N.Y. - The Penn Traffic Co. said it will sell its five warehouse distribution centers for $37 million and emerge from bankruptcy during the first quarter of 2005, according to published reports.
The regional grocer laid out its plans in an amended reorganization plan filed late last week with the U.S. Bankruptcy Court in White Plains, N.Y.
The company will sell its three New York warehouses in New York and two Pennsylvania facilities to Needham, Mass.-based Equity Industrial Partners Corp., a buyer and leaser of warehouse properties. Equity Industrial will then lease the properties back to the grocer for at least 15 years.
The deal gives Penn Traffic the financial strength and flexibility to emerge from bankruptcy, significantly reducing company debt and providing strong liquidity for funding operations, according to Penn Traffic president and c.e.o. Robert Chapman.
The DCs supply the company's 109 supermarkets in New York, Vermont, New Hampshire, and Pennsylvania, which operate under the P&C Foods, Quality Markets, and BiLo banners. The warehouses also supply 119 independent supermarket operators.
The bankruptcy court and Penn Traffic's creditors must approve the reorganization plan. A hearing has been scheduled for Jan. 27.
Since it filed for bankruptcy in May 2003, Penn Traffic has shuttered or sold 104 stores, eliminated 5,000 jobs, merged facilities, slashed overhead costs, and brought in new products, marketing, and distribution. The company currently has a work force of about 8,800.
Penn Traffic declared bankruptcy for the first time in 1999, after having lost over $324 million between 1994 and 1998.