Uno restructures debt to exit Chapter 11

Jan. 19, 2010
Uno Restaurant Holdings Corp. recently announced a financial restructuring strategy. The move will recapitalize the company and eliminate substantial debt through the conversion of $142 million of senior notes into a controlling equity stake, according to a company statement. The recapitalization will give Uno the resources to invest in its growth opportunities.
"The steps we've taken represent the culmination of many months of work on the part of the company, its current owners and the noteholder group made up of members comprising a majority of the company's outstanding notes," said Frank Guidara, president and CEO of Uno.
"The Uno brand is strong; it's the balance sheet that needs fixing. Today's announcement marks the beginning of a new era for Uno, wherein the company will no longer be saddled with a burdensome debt load. Accordingly, we will now be able to leverage our operational strength which, combined with the substantially improved cash flow expected to result from our restructuring, will put us in a position to make long-term investments in the future of Uno's core businesses, Uno Chicago Grill restaurants, Uno Due Go, Uno Express and our Uno Foods Consumer Products Business."
In order to most effectively consummate this restructuring, Uno elected to file a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, Southern District of New York. The company's filing involves a pre-arranged reorganization transaction that includes a negotiated term sheet outlining the material terms of the restructuring plan and related plan support agreements from the noteholder group. In addition, subject to certain conditions, Uno has negotiated the terms under which they intend to seek court approval for a debtor-in-possession financing facility of $52,000,000 from its existing senior lender, Wells Fargo Capital Finance, Inc. and the noteholder group.
"With our anticipated debtor-in-possession financing and the support of a majority of the holders of our notes, we commence this process on very solid financial footing and we expect to exit Chapter 11 in an expeditious manner," Guidara said. "From the perspective of our customers, it will be business as usual in our restaurants and consumer products business, and they will see the same commitment to quality and service that they have come to expect from the Uno brand. We are also working very closely with our employees, vendors and partners, and we expect no disruption to our daily operations."

Topics: Business Strategy and Profitability

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