MONTVALE, N.J. — A&P has reached an agreement with Yucaipa Cos., Mount Kellett Capital Management and Goldman Sachs on a $490 million investment that would allow the company to emerge from bankruptcy as a privately held company early next year.
The deal — which requires approval from U.S. Bankruptcy Court — was to be filed in court papers Thursday, according contents of an internal memo obtained by SN.
"This agreement is good news for our company. By making this commitment, these sophisticated investors who know our company and industry well, are demonstrating confidence in our management team and our associates' ability both to complete the turnaround, and position the company for success going forward."
The United Food and Commercial Workers union Thursday said it was reviewing the proposal. "It is very important to realize that the financial arrangement to bring the company out of bankruptcy is contingent upon labor agreements that are modified from their present form. Our labor agreements will be different than those we are presently working under,"said the statement from the UFCW A&P negotiating committee said.
A&P, with 336 stores in seven states in the Northeast and Mid-Atlantic, has been in bankruptcy since December of last year.
Yucaipa has been an investor in A&P for several years. Mount Kellett, with offices in New York, London, Mumbai and Hong Kong, focuses on "global distressed, special situations and opportunistic investing," according to its website.