CKE Restaurants, Inc. (NYSE: CKR) announced today that the company has completed a series of asset dispositions ahead of schedule and has generated the approximately $30 million of after tax net sale proceeds it forecast it would complete by the end of November. These are the latest transactions in the company’s previously announced re-franchising effort, which is designed primarily to reduce debt and rebalance the Hardee’s system to a more manageable number of company-owned restaurants. These asset dispositions have enabled the company to reduce its senior debt to $219 million as of the end of the third quarter.
The largest transaction in this series of asset dispositions was for 61 Hardee’s restaurants in the Huntsville/Montgomery, Alabama area for a purchase price of approximately $18 million, with net cash proceeds to the company of approximately $17.4 million. This is the third purchase of Hardee’s restaurants made by this franchisee. The companies under control of this franchisee previously purchased 42 other Hardee’s restaurants in the Biloxi, Mississippi and Mobile, Alabama markets.
In a separate transaction, 12 Carl’s Jr. restaurants in the Los Angeles, California market were sold for approximately $11 million, with net sale proceeds to the company of approximately $10.1 million. The buyer of the Los Angeles area restaurants is D.F.G. Restaurants, Inc., a former quick service restaurant operator based in California.
“We are pleased with our continuing progress on our asset sale program and have every confidence that our momentum to accelerate our debt repayment will continue,” said Andy Puzder, CKE’s president and chief executive officer. “We have now sold 323 Hardee’s and 43 Carl’s Jr. restaurants and, when combined with proceeds generated from the sale of other assets, have raised approximately $118 million of after tax net sale proceeds since the beginning of the refranchising program. We also are pleased with the high caliber of franchisees who have purchased these restaurants and made this commitment to operate Hardee’s and Carl’s Jr. restaurants.”
CKE Restaurants, Inc., through its subsidiaries, franchisees and licensees, operates more than 3,800 quick-service restaurants, including 967 Carl’s Jr. restaurants located in 13 Western states and Mexico; 2,747 Hardee’s restaurants in 37 states and 11 foreign countries; and 125 Taco Bueno restaurants in Texas and Oklahoma.