Syracuse, NY - Supermarket operator Penn Traffic Co. said it is negotiating to convert part of its debt into equity and also said it will close more stores -- moves that are part of a restructuring plan.
An informal committee of note holders has said it will support full repayment to the company's trade creditors in connection with the proposal, said the company, which operates supermarkets in Pennsylvania, upstate New York, Ohio and West Virginia.
Penn Traffic also said it will close 21 Bi-Lo stores and lay off about 550 full and part-time workers. Nine of those were closed in the third quarter. The company will take a charge, but has not released the amount or when the charge relating to the layoffs will occur, a spokesman said.
Penn Traffic also said it intends to continue plans to sell 22 Bi-Lo stores and use the proceeds to satisfy its short-term capital needs.
Three others already have been sold. A company spokesman declined to disclose the location of the store but said the 32 the company plans to retain are located in Western Pennsylvania.
The informal committee of noteholders is comprised of holders of more than 40 percent of the principal amount of its senior notes and holders of more than half of the principal amount of its subordinated notes, Penn Traffic said.
On Thursday, the company said it lost $41 million or $3.88 per share in the third quarter, compared with a loss of $13.5 million or $1.25 per share for the same period a year ago.
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