Restaurant Brands to de-lever Popeyes debt, improve capital structure

By Devika Patel

Knoxville, Tenn., March 29 – Restaurant Brands International Inc. plans to de-lever some of the debt it accrued when acquiring Popeyes Louisiana Kitchen.

After that, the company intends to evaluate its position and continue to optimize its capital structure.

“As we think about capital allocation and our capital structure over the next 12 [to] 18 months, I think that we’ll be focused on de-levering as we did take on some additional debt in connection with the Popeyes transaction and I think we’ll be very conscious of the fact that we have both the first calls on some of our bonds coming up and the first redemption date on some of our preferred equity coming up at the end of this year,” chief financial officer Joshua Kobza said at the CIBC Retail & Consumer Conference in Toronto on Wednesday.

“I think as we get closer to that, we’ll be looking at some of our options to see if there’s not potential to optimize some of the pieces of our capital structure.

“That’s probably the most mid-term focus for us from a capital structure perspective.

“Then, once we get past that point, I think we’ll be in a position to evaluate where we go from a capital structure perspective.

On Feb. 21, Restaurant Brands announced it had received a commitment for $1.3 billion of debt financing to help fund its acquisition of Popeyes.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC provided the financing commitment.

Under the agreement, Popeyes is being bought for $79 per share in cash, or $1.8 billion.

Other funds for the transaction, which is expected to close in early April, will come from about $600 million of cash on hand.

Restaurant Brands is an Oakville, Ont.-based quick service restaurant company.

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