- July 1, 2020 / 3 min readIt owns over 1,225 Pizza Hut and over 385 Wendy’s restaurants in the US.
NPC International Inc., the largest franchisee of Pizza Hut restaurants in the US has filed for bankruptcy after covid-19 pandemic has forced restaurants to close for so long.
The closely held company sought Chapter 11 protection in the Southern District of Texas court on Wednesday, shared a BloombergQuint report.
It owns over 1,225 Pizza Hut and over 385 Wendy’s restaurants in the US.
The group has struggled with rising labor and food costs while trying to expand delivery and move away from traditional dine-in restaurants.
The company has $903 million in debt and has pre-negotiated a restructuring agreement with about 90% of its first lien lenders and 17% of second lien lenders. The plan is aimed at reducing the company’s debt, with first lien lenders taking equity and potentially participating in a new cash injection. It also includes the sale of at least part of the company’s restaurants, according to the filing.
The Chapter 11 filing doesn’t mean Pizza Hut and Wendy’s are going out of business. NPC can continue running its outlets while it works out a plan to pay its bills and turn the business around.
Also, the bankruptcy doesn’t affect Pizza Hut and Wendy’s outlets owned by other franchisees.
Ahead of the pandemic, NPC, backed by private investment firm Eldridge Industries LLC, brought in the help of restructuring advisers at law firm Weil Gotshal & Manges as well as investment bank Greenhill & Co. and operational adviser AlixPartners LLP, Bloomberg reported. Eldridge wrote off its equity investment in NPC last year.
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