Sbarro Inc. has exited Chapter 11 bankruptcy protection with reduced debt and a new $35 million capital infusion from its lenders, the Italian quick-service company said Tuesday.
Interim president and chief executive Nicholas McGrane called the post-bankruptcy Sbarro “a stronger, better capitalized, and more competitive company with a solid financial foundation for future growth."
“Our reorganization plan eliminates more than 70 percent of our debt, and provides access to $35 million in fresh capital from our new ownership group,” he added.
McGrane also said Sbarro “is performing well, and as we enter our busiest period of the year, we look forward to building on our positive momentum and continuing to deliver great food and service to our customers.”
Earlier, McGrane had said the brand’s same-store sales have increased year-to-date, including improvements in the third quarter. He also said Sbarro anticipates generating positive cash flow before the end of the calendar year.
The company has shuttered about 25 company-owned locations since then.
Sbarro, which was acquired in 2007 by the private-equity firm MidOcean Partners, filed for bankruptcy in April 2011. At the time, officials blamed reduced customer traffic, increased competition, and higher food costs for its financial performance.
A source close to the deal said MidOcean no longer holds a stake in Sbarro, but it was unclear at presstime who the new owners are.
Based in Melville, N.Y., Sbarro has more than 1,000 restaurants in more than 40 countries. It generated sales of $476 million in 2010, down from $481 million a year earlier, according to Nation’s Restaurant News Second 100 Census of chains and companies in the foodservice industry.
— Paul Frumkin, NRN.com