Uno's Pizzeria

Uno’s recapitalization attempt fails
Sept. 15, 2008
(AP) — Uno's Chicago Grill, which got its start in Chicago, said Monday an attempt to recapitalize its business with its bondholders has fallen through. The restaurant chain also said it paid a $7.5 million interest payment it had deferred in order to try to hammer out an agreement.

Uno spokesman Richard Hendrie said the payment had been made on Thursday. The interest is on the company's $141 million in senior secured notes.

The Boston-based privately held company, famous for its deep-dish pizza, had come under scrutiny for deferring the payment, which originally had been due in August.

At the time, Uno's said it was taking advantage of a standard clause in the original agreement for the notes that allowed for a 30-day grace period on the payment. The grace period came to an end Monday. The company would have been in default if it had not been able to make the payment by then.

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wendy - turner - recapitalization attempt fails - latest budget crisis - grace periodSponsored by Uno's had been using the grace period to negotiate with bondholders to recapitalize its balance sheet.

But Chief Financial Officer Louie Psallidas said in a statement that "given the company's current level of profitability and liquidity position, we did not feel compelled to agree to terms that were not in the best interests of the company."

Hendrie did not offer any details about the terms offered by bondholders.

Uno's said it is in compliance with all provisions of its bond indenture and its bank debt agreements, adding that future interest payments "can and will be made in a timely fashion."

The chain had hoped to use the recapitalization to accelerate its growth. Uno's said it still has enough liquidity to fund several of its initiatives including developing domestic and international franchise locations and rolling out its Uno Due Go concept which offers pizza and sandwiches to go in airports, hospitals and other commercial locations.

Hendrie declined to rule out a future recapitalization, but said "it has to be the right circumstances."