DALLAS, Nov. 7, 2005 (PRIMEZONE) -- Romacorp, Inc., owner and franchisor of Tony Roma's restaurants, has reached an agreement in principle with a majority of its bondholders for a consensual restructuring, whereby the bondholders would exchange their debt for predominant ownership in the company. The restructuring, which will take place under Chapter 11 of the U.S. bankruptcy code, is subject to court approval of a plan of reorganization and certain other contingencies. The restructuring would provide Romacorp's bondholders with approximately 90 percent ownership of the Company upon successful completion of the process.
Romacorp said that despite continued growth in new franchised restaurant openings and strong sales increases from remodeled company-owned restaurants in recent years, high-interest debt incurred during the '90s has stifled its progress. Refinancing the debt, combined with the resulting change in ownership, should provide a much stronger platform for future growth, the company said.
"We are excited about the opportunity to restructure our company," said Romacorp CEO David Head. "This will allow us to accelerate our growth plan, which includes a very successful new prototype and a remodel package that is delivering double-digit sales increases. Tony Roma's is successful and well known throughout the world, and once this process is behind us, we look forward to taking this great brand to new heights."
Romacorp owns and franchises 226 Tony Roma's restaurants domestically and in 30 foreign countries around the globe, and has franchise agreements in place to open numerous additional restaurants over the next few years.
The company said it expects to complete the restructuring process by the end of the first quarter of 2006. The transaction is subject to bankruptcy court approval and confirmation of the Chapter 11 plan, as well as certain other contingencies. During the restructuring process, Romacorp said it expects to meet its financial obligations in the ordinary course of business.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements concerning the timing or amount of future revenues; the restructuring of indebtedness; future restaurant openings and remodeling; as well as any statement, express or implied, concerning future events or expectations is a forward looking statement. Use of words such as "expect," "look forward" and "should," etc., is intended to identify forward-looking statements that are subject to risks and uncertainties, including risks and uncertainties that the assumptions behind future revenue and growth may not prove accurate over time; risks that the restructuring and future restaurant openings and remodeling may not be successful. There can be no assurance that any expectation, express or implied, in a forward-looking statement will prove correct or that the contemplated event or result will occur as anticipated.