DENVER—Sandwich chain Quiznos has a new owner and a lighter debt burden.
The company said Tuesday that it had successfully renegotiated its debt load with terms that should keep it out of bankruptcy court. Under the agreement, Quiznos’ creditors agreed to forgive about one-third of its outstanding debt, or about $300 million.
The deal also makes New York hedge fund Avenue Capital Group the sandwich company’s majority owner, after Avenue pumped $150 million into the company. Avenue, run by investor Marc Lasry, focuses on distressed properties.
Quiznos first outlined the terms of the restructuring last month, saying its creditors had about a month to decide whether to accept the new terms. If they hadn’t, Quiznos probably would have filed for bankruptcy protection.
The Denver-based chain has promoted itself as a higher-end alternative to the Subway sandwich chain. But the company’s previous owners, private-equity firm CCMP Capital Advisors LLC and Consumer Capital Partners, loaded it up with debt in a leveraged buyout, according to the Wall Street Journal. The chain’s revenue fell as customer traffic dropped during the recession, and the company was forced to close stores.
“Improving our balance sheet and putting our capital structure issues behind us are major steps forward to strengthening the Quiznos brand and our customer experience,” CEO Greg MacDonald said in a statement.
