Wendy's/Arby's CFO: Arby's sale would drop net debt to $860 million

By Jennifer Lanning Drey

Savannah, Ga., March 14 - A sale by Wendy's/Arby's Group Inc. of the Arby's brand would reduce the company's net debt to about $860 million, as $200 million of capital lease obligations would be shed, Stephen Hare, Wendy's/Arby's chief financial officer, said during a Monday presentation at the Roth Growth Stock Conference in Dana Point, Calif.

More importantly, it would allow the company to focus all of its resources on the Wendy's brand, its primary growth vehicle for the foreseeable future, Hare said.

Any cash proceeds from the sale would be available for reinvestment in Wendy's growth initiatives, which is the company's top priority for its cash, he said.

Wendy's/Arby's announced in January that it is exploring strategic alternatives for Arby's Restaurant Group with the help of UBS Investment Bank.

"We believe 2011 will be a transition year, primarily because of the strategic alternatives review that we have with Arby's right now," Hare noted on Monday.

After 2011, the company expects to be able to grow EBTIDA by 10% to 15% per year.

When asked whether Wendy's/Arby's would consider other alternatives for the Arby's brand outside of a sale, Hare said other restructuring options such as a spin-off would be considered, but the company is putting most of its efforts into a possible sale.

"There are alternatives if we don't get an acceptable offer," Hare added.

Wendy's/Arby's is an Atlanta-based quick-service restaurant company.

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