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| 8-K - PENN TRAFFIC CO | v164722_8-k.htm |
PENN
TRAFFIC ENTERS AGREEMENT TO MAINTAIN LETTERS OF CREDIT AND OTHER EXTENSIONS OF
CREDIT
SYRACUSE,
N.Y. – The Penn Traffic Company (Pink Sheets: PTFC), entered into a forbearance
agreement with all of its senior working capital lenders and General Electric
Capital Corporation ("GE Capital"), as agent for the lenders, on November 3,
2009.
“We
continue to work closely with our lenders and appreciate the flexibility that
they have provided us with this latest agreement,” said President and Chief
Executive Officer Gregory J. Young.
The
company currently expects that, under the terms of the forbearance agreement,
the participating lenders will continue to provide letters of credit and other
forms of credit to the company through at least November 25,
2009. This forbearance agreement was necessitated by GE Capital’s
notification on October 30, 2009 that Penn Traffic was in technical default of
certain provisions of its current credit agreements.
In
connection with the forbearance agreement, Penn Traffic’s board of directors has
retained Ronald F. Stengel, senior managing director with the firm of Conway Del
Genio Gries & Co., LLC, as Penn Traffic’s chief restructuring officer,
effective immediately. His firm has worked with Penn Traffic on a
variety of matters, including extensive financial advisory services from 2006
through 2008.
Penn
Traffic’s procurement partner for most categories represented in the company’s
retail stores, C&S Wholesale Grocers Inc., has been notified of these
developments and is expected to continue providing its services to Penn Traffic
without interruption.
About
Penn Traffic
The Penn
Traffic Company owns and operates supermarkets under the P&C, Quality and
BiLo trade names in Upstate New York, Pennsylvania, Vermont and New
Hampshire. Headquartered in Syracuse, N.Y., Penn Traffic’s
conventional supermarkets offer value pricing, fresh and local products, and
full-service stores in convenient neighborhood locations. The
regional retailer’s P&C Fresh supermarkets combine all the features of
conventional-format stores with gourmet, premium and store-made fresh products,
as well as ready-to-eat foods, easy-to prepare meals and expanded natural and
organic product offerings. Retail supermarkets and consumers became
Penn Traffic’s primary focus with the sale of its wholesale business segment
during fiscal 2009. More information on the company may be found at
www.penntraffic.com.
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Forward
Looking Statements
This
press release contains forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended, reflecting
management’s current analysis and expectations, based on what management
believes to be reasonable assumptions. These forward-looking statements include
statements relating to our anticipated financial performance and business
prospects. Statements preceded by, followed by or that include words such as
“believe”, “anticipate”, “estimate”, “expect”, “could”, “may”, and other similar
expressions are to be considered such forward-looking statements.
Forward-looking statements may involve known and unknown risks, uncertainties
and other factors, which may cause the actual results to differ materially from
those projected, stated or implied, depending on such factors as: risk factors
set forth in the company’s annual report on Form 10-K for the fiscal year ended
January 31, 2009; general economic and business conditions; economic and
competitive uncertainties; the ability of the company to improve its operating
performance and effectuate its business plans; the ability of the company to
operate pursuant to the terms of its credit facilities and to comply with the
terms of its lending agreements or to amend or modify the terms of such
agreements as may be needed from time to time; the ability of the company to
generate cash; the ability of the company to attract and maintain adequate
capital; the ability of the company to refinance our indebtedness; increases in
prevailing interest rates; the ability of the company to obtain trade credit,
and shipments and terms with vendors and service providers for current orders;
the ability of the company to maintain contracts that are critical to its
operations; potential adverse developments with respect to the company’s
liquidity or results of operations; competition, including increased capital
investment and promotional activity by the company’s competitors; availability,
location and terms of sites for store development; the successful implementation
of the company’s capital expenditure program; labor relations; labor and
employee benefit costs including increases in health care and pension costs and
the level of contributions to the company sponsored pension plans; the result of
the pursuit of strategic alternatives; the ability of the company to pursue
strategic alternatives; changes in strategies; changes in generally accepted
accounting principles; adverse changes in economic and political climates around
the world, including terrorist activities and international hostilities; and the
outcome of pending, or the commencement of any new, legal proceedings
against, or governmental investigations of the company. The company
cautions that the foregoing list of important factors is not exhaustive.
Accordingly, there can be no assurance that the company will meet future
results, performance or achievements expressed or implied by such
forward-looking statements, which are not generally required to be publicly
revised as circumstances change, and which the company does not intend to
update.
###
FOR PENN
TRAFFIC:
Jeffrey
Schoenborn of Travers Collins & Company Investor Relations, 716-464-4732,
jschoenborn@traverscollins.com.
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