Advantica bondholders gain $400 million support in campaign to oppose exchange

New York, Jan. 28 - The unofficial committee of holders of Advantica Restaurant Group, Inc.'s 11¼% senior notes due 2008 said it has support from investors owning approximately $400 million principal amount of notes for its campaign in opposition to the company's proposed exchange offer.

According to information in Advantica's offer, the group would now appear to have enough backing to prevent the exchange going through. Advantica said the offer is subject to at least $160 million of notes being tendered. However the company has $529.6 million outstanding so even if all the remaining $129.6 million accepted the threshold would not be reached.

The committee also said it has written a second letter to Advantica, saying it is not opposed to a deleveraging transaction of some type but believes "the elimination of $60 million in principal proposed by Advantica is not appropriate or fair to bondholders."

On Dec. 28, Advantica announced an offer to exchange up to $204.1 million of registered 12¾% senior notes due Sept. 30, 2007 for up to $265.0 million of its outstanding 11¼% senior notes due 2008. The new notes will be issued jointly by Advantica and its Denny's Holdings, Inc. unit - making them senior to the old notes - and the Spartanburg, S.C. restaurant company is offering $770 principal amount of new notes for each $1,000 principal amount of old notes plus accrued interest in cash.

When it announced the offer, Advantica said that the exchange offer will reduce its outstanding debt, which may help to improve its access to financing and its ability to refinance its revolving credit facility due January 2003.

The offer expires at 5:00 p.m. ET on Feb. 1, 2002.

If more than $265 million of old notes are tendered, the new notes will be allocated on a pro rata basis.

UBS Warburg LLC is dealer manager for the exchange offer, MacKenzie Partners, Inc. is information agent and U.S. Bank NA is the exchange agent.

The unofficial committee is still inviting noteholders to contact it via Robert Davenport at Cerberus Capital on 212 891-2100 or Conseco's Johnson at 317 817-2112.

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