NASHVILLE — O’Charley’s Inc. has completed the 20-year sale-leaseback of 50 O’Charley’s restaurant properties with Scottsdale, Ariz.-based STORE Capital for $105 million. Nashville-based O’Charley’s will use $103.8 million of the sale proceeds and $11.4 million of available cash to redeem at par its entire $115.2 million principal amount of 9 percent senior subordinated notes due November 2013. The transaction will leave the company with virtually no long-term debt.
“As a result of this 20-year sale-leaseback, we believe we have significantly strengthened our financial position,” said David Head, president and CEO of O’Charley’s, in a statement. “In addition, by monetizing approximately half of our real estate portfolio and locking in more favorable long-term financing, the transaction increases our flexibility in a difficult operating environment.”
In addition, O’Charley’s reduced its revolving credit facility to $30 million from the previous $45 million and extended the term from 2013 to 2016. This will allow the company to spend up to $5 million on renovations and expansions, with up to 35 percent EBITDA for 2012 and beyond.
There are currently 227 O’Charley’s restaurants in 18 states in the Southeast and Midwest, 221 of which are company-owned.
— Savannah Duncan