Penn Traffic receives multiple sale-leaseback proposals, delays hearing

By Jeff Pines

Washington, Sept. 22 - Penn Traffic Co. said it has received multiple sale-leaseback proposals, which could net the company enough money repay all of its senior secured lenders with enough left over to invest in its stores and other working capital needs.

The Syracuse, N.Y.-based supermarket company has asked to delay the Sept. 23 hearing on its disclosure statement until Oct. 21. The company said it would use the time to evaluate the proposals and, if necessary, amend the disclosure statement with a detailed description of the sale-leaseback transaction.

The sale-leaseback proposals received by Penn Traffic are non-binding and any definitive transaction remains subject to execution of binding agreements and other customary conditions, including approval of the U.S. Bankruptcy Court for the Southern District of New York.

The previously filed reorganization plan contemplated that the reorganized Penn Traffic would emerge from Chapter 11 with about $55 million of senior secured bank debt and about $50 million of undrawn availability under its proposed working capital revolving credit facility.

The company's official creditors' committee and the secured bank holders support the delay, Penn Traffic said.

Penn Traffic filed or bankruptcy on May 30, 2003.

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