CARR GOTTSTEIN FOODS ANNOUNCES SALE/LEASEBACK TRANSACTION; TIAA-CREF to Provide Financing for Transaction.ANCHORAGE, ALASKA--(BUSINESS WIRE)--May 1, 1995--Carr Gottstein Foods Co. (NYSE NYSE See: New York Stock Exchange :CGF CGF Commonwealth Games Federation (UK) CGF Computer Graphics Forum CGF Computer Generated Forces CGF Chlorella Growth Factor CGF Charging Gateway Function CGF Crystal Growth Furnace CGF College Golf Foundation ), the largest food and drug retailer in Alaska, announced today that it has entered into letters of intent with an institutional equity investor and Teachers Insurance & Annuity Association - College Retirement Equities Fund (TIAA-CREF TIAA-CREF Teachers Insurance and Annuity Association - College Retirement Equities Fund ) regarding a sale/leaseback transaction that would encompass substantially all of the real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most by the Company. Under the terms of the proposed transaction, Carr Gottstein Foods will sell twelve retail centers and a distribution center to the institutional equity investor, and lease them back at a fixed rate for twenty-five years, with several additional option periods. TIAA-CREF will provide the debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay for this transaction. The closing of the sale/leaseback transaction remains subject, among other things, to the negotiation of definitive agreements and is expected to be completed within ninety days. The properties included in the sale have an appraised value An appraised value (USA) or mortgage valuation (Australia) pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a of approximately $100 million, and Carr Gottstein Foods plans to use the proceeds to reduce its existing debt. The transaction will lower the Company's debt- to-equity ratio and, excluding extraordinary expenses associated with the transaction, have a slightly positive impact on earnings per share. Mark R. Williams, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Carr Gottstein Foods said, "We are very pleased with this opportunity to realize the value of our real estate assets. The sale of these properties allows us to substantially reduce our debt, which will significantly improve our leverage ratio. In addition, the 25- year duration of the fixed-rate lease will facilitate the company's long-range planning." Teachers Insurance & Annuity Association - College Retirement Equities Fund (TIAA-CREF) is the world's largest pension system and currently has $135 billion in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , serving 1.7 million employees at 5,400 colleges, universities and other non-profit institutions nationwide. Carr Gottstein Foods operates 38 stores in Anchorage, Fairbanks, Ketchikan, the Kenai Peninsula and other Alaska communities, as well as Alaska's largest freight company and the state's only full-line food warehouse and distribution center. Annual revenues in 1994 were $577.1 million. CONTACT: Mary Ann Dunnell Robinson Lake Sawyer Miller (212) 484-7797 or Mark Williams President and Chief Executive Officer Carr Gottstein Foods Co. (907) 561-1944 |
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