Fat Brands Inc 8.25% Series B (FATBP)
Looks like ALL preferreds have halted their dividend. It's a cumulative preferred so there is a possibility they could strt again but debt liabilities look bad. Will have to di into their assets to see if there is a chance to turn this around. They spun off their hospitality division and that does not bode well for the parent company unless they may/could sell those assets. Preferred shareholders received nothing from that spin off.
FAT Brands halted dividend payments on its 8.25% Series B Cumulative Preferred Stock—and other preferred shares—as part of a broader suspension that included stopping common stock dividends in 2025. This decision was driven by significant financial distress stemming from the company’s high debt load, sharp declines in revenue, and deteriorating cash flows. In the most recent quarter, FAT Brands reported a substantial net loss ($54.2 million) and a year-over-year revenue decrease of 3.4%. Mounting cash burn, negative common equity, and chronic liquidity issues forced management’s hand.
Key reasons for stopping payments and current preferred status:
- All preferred shares, not just the Series B, ceased receiving dividends. This marks a company-wide freeze across all equity classes with dividend rights.
- The primary cause is financial strain: FAT Brands has over $1.5 billion in debt and ongoing operational losses, making continued payouts unsustainable.
- Preferred shares are cumulative, so unpaid dividends will accrue, but holders are not currently receiving cash payments.
Relevant corporate and management events:
- FAT Brands failed to achieve projected growth, reporting store closures, lower same-store sales, and negative earnings surprises.
- Major restructuring/optimization efforts have been announced, such as switching certain debts to interest-only and reducing annual general and administrative expenses by $5 million. These actions were designed to preserve cash in the face of severe headwinds.
- The management team, led by Chairman Andy Wiederhorn and Co-CEO/CFO Ken Kuick, continues to communicate these challenges and cost-saving initiatives in quarterly calls and investor presentations, but has not signaled a near-term resumption of preferred dividends.
In summary, FAT Brands’ halt of preferred and common dividends is directly linked to their acute financial pressures, heavy debt, and underperformance. Unless and until the firm stabilizes its finances and cash generation, regular dividend payments on any of its preferred shares are unlikely unlikely to resume. |
