Denny's to use $92 million stock sale proceeds to reduce debt

Pittsburgh, July 7 - Denny's Corp. will use $92 million in proceeds from a private placement of 48.4 million shares of common stock to reduce debt by paying down the company's outstanding credit facility and possibly by refinancing some or all of its senior notes, according to a company release.

The proceeds will also be used for general corporate purposes.

Denny's said in the release that it may initially use the proceeds to reduce debt by repaying a portion of the company's outstanding credit facility and prepaying or purchasing a portion of its 12¾% senior notes due 2007 and/or its 11¼% senior notes due 2008.

"We believe these efforts will enable us to lower our interest expense, providing additional cash flow for investment in new restaurants, remodels of current restaurants and other growth initiatives," chief financial officer Andrew F. Green said in the release.

The stock sold at a price of $1.90 per share. Denny's now has 89.7 million shares outstanding.

Denny's is a Spartanburg, S.C.-based full-service family restaurant chain.

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