EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
Susanne Marsh Kimberly Kriger/Jim Fingeroth
Manager, Corporate Communications Kekst and Company
(973) 890-6101 (212) 521-4800
[email protected]
GRAND UNION FILES VOLUNTARY CHAPTER 11 TO PROVIDE
FURTHER FUNDING DURING SALE PROCESS
WAYNE, NJ, OCTOBER, 3, 2000 - The Grand Union Company (OTC.BB: GUCO) today
announced that, in order to facilitate the planned sale of the Company and
provide for additional funding during the sale process, it has filed a voluntary
chapter 11 petition in the U.S. Bankruptcy Court in Newark, New Jersey. The
filing will enable the Company to continue to conduct business as usual, provide
service to its customers and meet its commitments during the sale process.
Grand Union also announced that it has obtained a $60 million
debtor-in-possession financing commitment from Lehman Commercial Paper Inc., one
of its existing lenders. Upon court approval, these funds will be available to
the Company to help meet its ongoing needs and fulfill obligations associated
with operating the business, including the prompt payment to vendors for goods
and services that are provided after today's filing. Employees will continue to
be paid in the normal manner.
Commenting on Grand Union's announcement, president and chief executive officer
Gary M. Philbin said, "This was a difficult but unavoidable decision in view of
our recent financial performance and the need to obtain the funds to continue to
provide service to our customers and meet our ongoing commitments during the
sale process. At the same time, we have been working closely with our investment
banker, Merrill Lynch, in seeking a sale of the Company to a new owner or
owners, who are financially capable of supporting the business long term.
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"To this end, we have received expressions of interest from several parties and
continue to be in discussions with potential purchasers of the Company in whole
or in part. We believe chapter 11 protection will enable us to move forward with
the sale process in an orderly manner and hope to have an agreement to sell the
Company shortly.
"In the interim, we expect normal operations of our stores, which will be open
for business and serving customers as usual. Our new financing will enable us to
meet our commitments to our trade and business creditors and fulfill our
obligations to our employees without disruption. Importantly, our major
supplier, C&S Wholesale Grocers, has agreed to continue to provide us with a
regular flow of merchandise, and other suppliers are expected to continue
regular shipments to our stores," Mr. Philbin concluded.
In its most recent financial results, for the 16-week first fiscal quarter ended
July 22, 2000, the Company posted sales of $658.0 million, compared with $687.3
million reported for the same period a year ago. Total sales were down 4.26%,
with 200 stores in operation this year and 219 last year. Same store sales
declined 2.67%. EBITDA for the period was $17.7 million this year, including a
gain of approximately $6 million from the sale of the Company's Deer Park, NY
location.
Grand Union operates 197 retail food stores in Connecticut, New Jersey, New
York, Pennsylvania and Vermont.
SOME OF THE MATTERS DISCUSSED HEREIN ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM FUTURE RESULTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FOR ADDITIONAL
INFORMATION ABOUT THE COMPANY AND ITS VARIOUS RISK FACTORS, PLEASE SEE THE
COMPANY'S MOST RECENT FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 1, 2000, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 2000.
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