Grocer A&P Files For Bankruptcy (GAP, JPM, TGT, WMT)
December 12, 2010 11:19 PM
Once the largest grocer in the country, Great Atlantic & Pacific Tea Co. (NYSE: GAP) filed for bankruptcy on Sunday.
The company filed for Chapter 11 bankruptcy in New York with more than $1 billion in assets and more than $1 billion in debt, according to court documents. J.P. Morgan (NYSE: JPM) will provide $800 million in debtor-in-possession financing.
The New Jersey-based grocer said its stores will remain fully stocked with no interruption.
A&P has been bleeding cash this year at the rate of nearly $5 milion a week. The company reported having less than $100 million in cash and short-term investments on hand in September and it faces debt maturities in June.
Supermarket chains have struggled during the recession and tepid economic recovery. The landscape has gotten more competitive as discounters like Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) have expanded into the food business.
On Friday trading in A&P's stock was halted due to pending news. The stock lost 67% before its halt on rumors the company was set to file bankruptcy.
