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Uno: Refinancing talks end, but growth plans on track

BOSTON Uno Restaurant Holdings Corp. said Monday that discussions with the company’s bondholders surrounding a potential refinancing have ended, and that it has paid on time the formerly withheld interest payment on its bonds.

Last month, Uno had said it would defer the twice-yearly interest payment to negotiate a recapitalization plan that it said could help the casual-dining operator shore up its balance sheet and facilitate growth. Discussions ended because mutually acceptable terms for both Uno and its bondholders could not be found, the company said.

“While we are disappointed É our operating results combined with our existing liquidity will enable us to meet our financial obligations and continue to invest in strategic initiatives,” said Frank Guidara, chairman and chief executive of Uno.

Uno operates or franchises 206 Uno Chicago Grill casual-dining restaurants, as well as a retail division that sells both frozen and refrigerated Uno branded products, like its signature Chicago-style, deep-dish pizza.

Growth initiatives for Uno include domestic and international franchising, the continued rollout of the Uno Express concept, investments in the consumer products division, refurbishing of older restaurants and the introduction of Uno’s newest concept, Uno Due Go, which is scheduled to debut in two locations in the Dallas-Fort Worth International Airport later this fall.

Uno said it remained in compliance with all provisions of its bonds and bank debt and holds “sufficient liquidity” to fund its growth and operating plans. It also said it anticipates that future interest payments would be paid on time.

As a privately held company, Uno does not release financial results or information. Private-equity firm Centre Partners holds a majority interest in the company. Guidara told Nation’s Restaurant News earlier this month that the chain’s latest-quarter sales fell 1.7 percent from a year ago but that its earnings before interest, taxes, depreciation and amortization, or EBITDA, beat year-ago numbers.

Many restaurant companies are struggling under large debt burdens that were garnered when capital was readily available and lending terms were not strict. In today’s tougher operating environment slower sales and higher costs have made it difficult for operators to meet lending terms and debt payments.

Companies that have been cited by credit rating agency Standard & Poor’s for weaker credit metrics include Uno, El Pollo Loco Inc., Perkins & Marie Callender’s Inc., Sbarro Inc. and Sagittarius Restaurants LLC. Some have been able to refinance debt, although at a higher cost of capital, while others struggling under high debt burdens have filed for bankruptcy, including the parent companies to Ryan’s Steakhouse, Old Country Buffet, Village Inn and Bakers Square, and most recently, the corporate units of Bennigan’s and Steak and Ale.

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