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    Penn Traffic Closes $10 Million Equity Financing

    SYRACUSE, N.Y. -- The Penn Traffic Co. last week closed a private placement of $10 million in new equity financing with three of its largest common stockholders.

    SYRACUSE, N.Y. -- The Penn Traffic Co. last week closed a private placement of $10 million in new equity financing with three of its largest common stockholders.

    "We believe this new equity investment is a strong show of support in Penn Traffic, its grocery industry franchise, and our management team by three of our largest stockholders," said Penn Traffic president and c.e.o. Gregory J. Young. "We intend to use the proceeds to fund our strategies for enhancing shareholder value, and improving the company's operational and financial performance."

    The company will execute on its business strategy and communicate with stockholders about these developments over the next few months, added Young.

    Investment funds managed by Bay Harbour Management, LLC; CR Intrinsic Investors, LLC; and King Street Capital Management, LLC bought a new series of Penn Traffic convertible preferred stock for $10 million. The preferred stock is convertible any time after the first anniversary of the closing at $16.12 per share, which equals Penn Traffic's 45-day weighted average trading price. The preferred stock will accrue an 8 percent dividend that may be paid in cash or continue to accrue, as the company determines.

    Two Bay Harbour representatives are on Penn Traffic's board of directors, but didn't take part in the decision by the board to approve the terms of the private placement.

    Conway, Del Genio, Gries & Co. served as Penn Traffic's financial adviser on the matter.

    Penn Traffic operates 103 supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the BiLo, P&C and Quality banners. Penn Traffic also operates a wholesale food distribution business serving about 121 independent operators and Penny Curtiss, a Syracuse-based commercial bakery.

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