Dec 22 U.S. sandwich chain Quiznos, which
is struggling with slumping sales and a recent violation of debt
terms, is close to a deal to restructure its roughly $870
million of debt, the Wall Street Journal said, citing people
familiar with the matter.
The deal under discussion is being driven by Quiznos's
biggest lenders, who have a plan to take ownership of the
company as long as other creditors give their consent, the
Should the deal not meet approval Quiznos plans to file for
Chapter 11 bankruptcy protection, the newspaper said.
As part of the tentative deal, hedge fund Avenue Capital
would convert its debt to equity and invest cash in Quiznos,
giving Avenue more than a 70 percent ownership stake in the
chain, the sources told the Journal.
Quiznos's current owners, private equity firm CCMP Capital
Advisors and investment firm Consumer Capital Partners are not
likely to get any recovery on their investments, the newspaper
Representatives for Quiznos, Avenue and CCMP contacted by the
Journal declined to comment. A representative for Consumer
Capital had no immediate comment.
Reuters could not immediately reach any of the parties for