NPC International Inc. is exploring restructuring options including a bankruptcy filing as the company saddled with $1 billion of debt struggles amid relentless restaurant competition, Bloomberg News reported. The largest franchisee of Pizza Hut restaurants in the U.S. started negotiating with its lenders after months of declining sales caused a cash crunch. The company aims to keep the restructuring out of court, but is weighing the possibility of a filing with a pre-negotiated plan in place. The operator of about 1,600 restaurants, including Pizza Hut and Wendy’s brands, recently defaulted on about $800 million of debt after it chose to skip loan payments. NPC then entered into a forbearance agreement with lenders to allow time to consider debt restructuring options. NPC, backed by private investment firm Eldridge Industries LLC, is working with restructuring advisers at law firm Weil Gotshal & Manges as well as investment bank Greenhill & Co. and operational advisor AlixPartners LLP. NPC's loans fall to record lows amid restructuring talks. The discussions are ongoing, and NPC is still exploring options that could restructure the company’s balance sheet out of court and keep it from filing for bankruptcy. Should NPC opt for bankruptcy, the court filing would be used, in part, to help the retailer renegotiate leases with landlords.
