Its getting real bad...3 3/4! Do I smell Chapter 11???
---------------------------------------------------------------------
Boston Chicken revenues below needs
NEW YORK, April 1 (Reuters) - Boston Chicken Inc.'s weekly revenues for the first 12 weeks of 1998 were below the
company's expectations and below the level required by the covenants in its senior credit facilities, its 10-K filing with the U.S.
Securities and Exchange Commission said.
The filing, made Tuesday, said its revolving credit facility and other senior credit facilities require average weekly net revenues
of at least $17,500 in the first quarter.
It said the company believes the revenues shortfall was primarily because of the limited success of new casseroles.
While Boston Chicken believes its system can achieve sufficient improvement in revenues during the rest of the quarter to
comply with the covenant, there is no assurance this will happen, the 10-K said.
If the company is in violation of the agreement, it continued, it will be unable to draw on the revolving credit facilities. If Boston
Chicken cannot use the facility and is unable to restructure the credit agreements, or otherwise obtain funds, ''the company
may not be able to meet its obligations.''
It also noted action by the required number of lenders, if the company is in violation of its credit agreements, could accelerate
payment of its debts totaling some $860 million.
For 1998, the company expects its primary sources of cash will be from store operations and borrowings under its revolving
credit facility.
In connection with a 1997 amendment to its senior credit facilities, Boston Chicken said it was required to (i) pledge to the
lenders additional collateral, (ii) amend its secured loan agreements with area developers to terminate the moratorium on the
company's ability to convert such loans into a majority equity interest in the developers and (iii) limit to $10.0 million the
company's use of cash in acquisitions. |
