MEXICO CITY (Reuters) - Mexico’s Alsea is suspending its commitments with banks for a year effective from June 29, under an agreement that will see an increase in interest and commission costs during the period, the restaurant operator said on Thursday.
Alsea Chief Executive Alberto Torrado said in a statement the flexibility would help the company recover from the coronavirus crisis, which prompted massive lockdown measures across its markets, hurting operations.
The company ALSEA.MX, which operates franchises of the coffee chain Starbucks and chain eateries such as Chili's and P.F. Chang's, also said it had agreed to maintain a minimal level of capital expenditures that will allow it to proceed with strategic projects and the operation of its restaurants.
As part of its agreement with banks, Alsea will maintain consolidated shareholders’ equity of 8.5 billion pesos ($378.40 million) and certain minimum liquidity levels, to be reviewed monthly. Alsea also said it had refinanced short-term credit contracts.
Compared with the prior year, Alsea’s sales fell nearly 76% in April, and dropped about 67% in May.
Reporting by Daina Beth Solomon; Editing by Anthony Esposito and TOm Brown
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