Priszm senior debt facility extended; company gets C$4 million loan

By Caroline Salls

Pittsburgh, Jan. 19 - Priszm Income Fund has entered into a forbearance agreement to extend the maturity date of its senior debt facility, including the payment of all interest, to Jan. 31, according to a company news release.

In addition the senior debt lender has agreed to temporarily suspend action to exercise its remedies for the company's defaults.

As part of the agreement, Priszm is not permitted to make payments on obligations that are subordinated to the senior debt facility, other than those related to the direct operation of the business.

Priszm said it has also executed a short-term financing agreement with the senior debt lender that provides a supplemental facility of up to C$4 million to ensure its business has enough liquidity to continue operations while a longer-term plan is developed.

Interest on the facility is 10% with a maximum one draw per week.

The loan will mature on Jan. 31.

Priszm said it is still in discussions with its senior debt lender and franchisor on various options to restructure the business, possibly including the sale of all assets.

The company's interim agreement with its franchisor, YUM! Restaurants International, related to the franchise agreements for 70 restaurants, expired on Jan. 15, as did its interim agreement to defer unpaid continuing fees.

Toronto-based Priszm Income Fund holds a 60% interest in Priszm LP, which owns and operates more than 400 quick-service restaurants in seven provinces across Canada including KFC, Taco Bell and Pizza Hut.

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