EX-99.1
PRESS RELEASE
EXHIBIT 99.1
PATHMARK STORES, INC., RECEIVES BONDHOLDER APPROVAL
& FILES PREPACKAGED PLAN OF REORGANIZATION
Company Receives $75 Million In DIP Financing and a Commitment
for $600 Million In Exit Financing From The Chase Manhattan Bank
Court Proceeding To Have No Impact on Operations;
Trade Creditors Unimpaired
CARTERET, NJ July 12, 2000 - Pathmark Stores, Inc., announced that over 99% of
the dollar amount of bonds voted have agreed to accept its proposed prepackaged
plan of reorganization (the "Plan"). Accordingly, as planned, the Company has
filed a petition for relief under Chapter 11 of the Bankruptcy Code seeking to
implement the Plan in the U.S. Bankruptcy Court for the District of Delaware.
The Company said that it expects to complete the reorganization proceeding in 45
to 75 days.
Under the Plan, trade creditors will not be impaired and will continue to be
paid in the ordinary course of business. In addition, there will be no impact on
Pathmark's employees or customers, as no stores will be closed or sold and no
layoffs will be implemented. As previously announced, the agreement provides
that upon consummation of Pathmark's reorganization, current holders of the
Company's bond indebtedness will receive 100% of the common stock of the Company
and warrants to purchase additional shares of common stock. The ownership
percentage excludes shares issuable upon the exercise of options granted in
connection with the Company's long term management incentive plan.
Jim Donald, Chairman, President and Chief Executive Officer of Pathmark Stores,
Inc., said, "The strong support of our bondholders for our prepackaged plan
demonstrates their belief that Pathmark's operations are healthy, valuable and
have great potential. With nearly $1 billion less debt, the newly reorganized
Pathmark, trading as a public company, will be able to invest increased amounts
in our business, enabling us to renovate and open new stores and compete more
effectively."
In support of the Plan, Pathmark has entered into an agreement with The Chase
Manhattan Bank for a $75 million debtor-in-possession ("DIP") financing
facility. Additionally, as previously announced, Chase has committed to provide
$600 million of Exit Financing. The DIP financing, which is subject to Court
approval, will enable Pathmark to continue normal operations during the
restructuring proceedings. The Exit Financing will be used to repay Pathmark's
existing credit facilities in full and provide approximately $200 million of
liquidity for post-reorganization operations.
Pathmark Stores, Inc., is a regional supermarket company currently operating 136
supermarkets primarily in the New York - New Jersey and Philadelphia
metropolitan areas.
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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 form future results expressed or
implied by such forward-looking statements. For additional information about the
Company and its various risk factors, see the Company's most recent Form 10-K
dated January 29, 2000, as filed with the Securities and Exchange commission on
April 28, 2000, and its form 10-Q dated April 29, 2000, as filed on June 13,
2000 and other documents as filed with the Securities and Exchange Commission.
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