Romacorp reaches agreement with noteholders to restructure senior notes

By Carlise Newman

Chicago, Aug. 20 - Romacorp Inc. said it reached an agreement with the holders of more than 80% of its outstanding 12% senior notes due July 1, 2006 on a plan to restructure the notes.

The lockup and voting agreement specifies that the senior notes will be refinanced with a combination of cash and newly issued notes of Romacorp under an out-of-court exchange offer or a bankruptcy filing.

The refinancing would reduce the company's cash interest expense.

Romacorp previously announced that it had retained Houlihan Lokey Howard & Zukin Capital as its financial advisor to evaluate alternatives.

"We have been working closely with our outside advisors and noteholders in order to strengthen our financial position and we are pleased to have reached this significant milestone," said David Head, chief executive officer and president, in a news release. "We still have significant challenges in front of us, but are optimistic we can successfully complete this process. Restructuring our debt burden would benefit all of our stakeholders by giving us the flexibility we need to make necessary investments for our concept and future growth."

Dallas-based Romacorp owns and operates Tony Roma's restaurants.

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