The Great Atlantic & Pacific Tea Co. (A&P) released a statement yesterday saying that, in response to shareholder inquiries, its consolidated balance sheet and liquidity “were not impacted by the September 15, 2008 bankruptcy filing of Lehman Brothers Holdings Inc. (“Lehman”) and certain of its subsidiaries, including Lehman Brothers International (Europe) (“Lehman Europe”) which was placed in administration in the United Kingdom. Lehman is not a party to the Company’s indebtedness under its Revolving Credit Agreement with Bank of America N.A. or its Senior Note obligations. Availability under the Revolving Credit Agreement was approximately $160 million at the end of the second quarter ended September 6, 2008 and there are no financial covenants under the Company’s loan agreements.
“In addition, Lehman Europe is party to a 3.2 million share lending agreement with the Company entered into in connection with the Company’s Convertible Note financings in December 2007. However, until the Company has more information regarding the bankruptcy proceedings involving Lehman and Lehman Europe and can properly assess whether Lehman Europe will be able to fulfill its obligation to return the borrowed shares, the Company will continue to consider the shares outstanding for corporate law purposes only and not for the purpose of computing and reporting per share results.”
“In addition, Lehman Europe is party to a 3.2 million share lending agreement with the Company entered into in connection with the Company’s Convertible Note financings in December 2007. However, until the Company has more information regarding the bankruptcy proceedings involving Lehman and Lehman Europe and can properly assess whether Lehman Europe will be able to fulfill its obligation to return the borrowed shares, the Company will continue to consider the shares outstanding for corporate law purposes only and not for the purpose of computing and reporting per share results.”
- KC's View:
