After the parent, United States-based NPC International declared bankruptcy, one of the Pizza Hut’ franchise operator in Indonesia, Sarimelati Kencana (PZZA) shareholders, Albizia Asean Opportunities Fund, has reduced its stake. As reported, the biggest franchisee has filed the bankruptcy with the brand owner Yum! Brands (NYSE: YUM) to close roughly a quarter of its restaurants and sell the remaining locations.
A perfect storm of corona-related shutdowns, a massive debt burden and rising labor and food costs tipped the company into bankruptcy. Speaking on the second-quarter earnings last week, the CEO, David Gibbs stressed, the chain has been shifting away from opening and operating restaurants with dining rooms.
Yum! now looking other operator and they want the new owner to have a better capital structure. NPC, which is also Wendy’ largest franchisee, had a massive amount of debt, more than $900 million, much of that debt was from a 2018 leveraged buyout by investment firms Delaware Holdings and Eldridge Industries.
The management of Sarimelati recently reiterated that it has no business or legal relationship with NPC. So far, the restaurant operator was opened 19 new outlets in various regions in Indonesia. The company also stated that the financial condition was still stable, as reflected in the net operating profit of Rp10.47 billion during the first six months of this year.
Currently, the issuer’ shareholders consist of PT Sriboga Raturaya (64.79%), DBS Bank/Albizia (5.78%), then JPMCB NA AIF CLT RE-The Scottish Oriental Smaller Companies Trust Plc (5.28%), and public (24.15%). Sriboga Raturaya owned and operated various companies across a range of sectors and continues to diversify international brands including Japan’ Mitsubishi Corp., Nissin, and YUM! brands.