Industry News | June 14, 2001
CKE Completes Sale, Expects Loss
"While we have enjoyed having Taco Bueno as a member of our family of QSR concepts, the sale of the chain allows us to better focus our management and deploy capital on our two core brands, Carl's Jr. and Hardee's,'' said Andrew F. Puzder, CKE's president and chief executive officer. ``From a high of almost $300 million early in fiscal 2000, we reduced the outstanding balance on our senior credit facility to $169 million at fiscal year ending 2001, and down to $106 million today, before application of the proceeds of the sale of Taco Bueno. The sale of Taco Bueno enables us to further reduce our outstanding senior credit facility by approximately $60 million. ``We embarked on a strategy in November 1999 to dispose of assets and close unprofitable stores to generate cash to reduce our level of indebtedness. That strategy, although it has resulted in substantial losses for financial reporting purposes, is necessary to position the company for future profitable operations. We expect to record a substantial loss for the first quarter, primarily composed of non-cash items such as store closure reserves, asset impairment charges and a loss on the sale of Taco Bueno.'' Praetorian Group acted as intermediaries in the transaction, assisting in negotiation, financing and closing.
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