Ruby Tuesday gets loan waiver of potential covenant non-compliance

By Sara Rosenberg

New York, March 5 - Ruby Tuesday Inc. has entered into a limited waiver through April 18 for its revolving credit facility and private placement notes regarding potential covenant defaults, according to a news release.

During the waiver period, the company hopes to complete an amendment of its coverage and leverage ratios in an effort to eliminate future potential events of default.

"We met with our bank group and private placement holders last week and believe we are well on the way to structuring a favorable outcome regarding our debt covenants that will work for all parties involved and be completed in advance of the expiration of the waiver period," said Sandy Beall, founder and chief executive officer, in the release.

"We remain committed to our plans, which provide for more than sufficient levels of cash flow available to service debt. With the completion of our remodeling initiative, our repositioning investments and expenditures, and the temporary suspension of new restaurant openings, our focus is firmly on sales and profits with all excess cash flow being used to reduce debt levels. This should allow us to strengthen our financial position over the coming quarters and then focus on our strategy of returning excess capital to shareholders through dividends and share repurchases," Beall added in the release.

Ruby Tuesday is a Maryville, Tenn.-based owner and franchiser of Ruby Tuesday brand restaurants.

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