Priszm Income Fund was granted court protection from creditors under the Companies’ Creditors Arrangement Act on Thursday as part of a plan to assist in the sale of its fast food restaurants.
The income trust, which has been struggling with debt, delayed the sale of its 232 KFC, Taco Bell and Pizza Hut restaurants in Ontario and British Columbia earlier this year because certain conditions had not been satisfied.
Priszm said Thursday it has received a number of expressions of interest for its remaining restaurants.
“The company is in the process of reviewing these offers and will be negotiating with the potential acquirers in order to maximize recovery for the company’s stakeholders and provide for a going concern solution for the business,” Priszm said in statement.
The Toronto Stock Exchange suspended trading in the fund and started a review to delist the fund from the exchange.
The fund holds a 60% interest in Priszm Limited Partnership, which owns and operates more than 400 KFC, Taco Bell and Pizza Hut restaurants in seven provinces across Canada. However, marketing for the brands rests largely with the American parent company Yum Brands, with Grip Ltd. handling advertising for all three in Canada.
Court protection from creditors, the company said, will allow for operations to continue uninterrupted during the restructuring. The company’s existing secured lenders have agreed to provide up to US$3 million in additional financing during the court-supervised process.
Priszm chief financial officer Deborah Papernick will serve as chief restructuring officer.
Priszm signed a deal late last year to sell its Ontario and British Columbia locations for about $46.4 million, to meet its cash needs and help with franchise upgrade requirements.
In January, the troubled company withheld a $2 million franchising payment as it continued to restructure.
