Chicago Pizza & Brewery Inc. Announces the Placement of Additional Debt and Equity Financing to Fund Expansion
HUNTINGTON BEACH, Calif.--(BUSINESS WIRE)--Feb. 23, 2001--Chicago Pizza & Brewery Inc. (Nasdaq:CHGO)(Nasdaq:CHGOW) announced that it has executed an agreement with Union Bank to provide the company with up to $8 million in debt financing.
The financing consists of two loans: a $4 million term loan which will be used to retire the company's current debt to WM Business Bank, and a $4 million line of credit to be used to fund expansion on an as-needed basis. As a condition of the financing, the company was required to raise an additional $2 million in equity. The company has satisfied this condition by executing an agreement to sell an aggregate of 800,000 shares of common stock to William H. Tilley and The Jacmar Companies at $2.50 per share on or before April 30, 2001. The purchasers are affiliates of BJ Chicago LLC, the company's current largest shareholder.
In addition, the company has agreed to sell to BJ Chicago LLC up to an additional 3.2 million shares at the same price on or before Aug. 15, 2001. The sale of additional shares is subject to a shareholder vote and the receipt of a favorable fairness opinion. The agreement was approved by an independent committee of the Board of Directors.
Paul Motenko, co-CEO of the company stated, "While the company has recently experienced very substantial growth, successfully opening five new restaurants in a 12-month period, our current $4 million credit line with WM Business Bank was not sufficient to allow us to maintain a reasonable pace of future expansion. We were unable to secure alternative debt financing without an infusion of additional equity, and consequently realized that if we wanted to continue to capitalize on the popularity of the BJ's concept, we needed to raise additional equity. We are very pleased that Union Bank has agreed to provide financing to our company, and we are also pleased that BJ Chicago LLC and its affiliates have agreed to provide the capital required to increase our borrowing capacity so substantially. The additional debt and equity will enable the company to accelerate its expansion, adding value for all shareholders. In fact, we hope to announce the execution of leases on two new locations within the next several weeks."
The company has almost eight million warrants outstanding, which, before this transaction, had an exercise price of $5.50 per share. The sale of the 800,000 shares of common stock will trigger the anti-dilution provision of the warrant agreement, resulting in an adjustment of the exercise price of the warrants to $5.35 per share. If the entire 3.2 million additional shares are purchased by BJ Chicago LLC pursuant to the agreement, the warrant exercise price would be adjusted to $4.89 per share.
Chicago Pizza & Brewery operates 29 casual dining restaurants, some of which incorporate brewpubs. Fifteen of the restaurants are located in Southern California, one is located in Lahaina, Maui and one is located in Boulder, Colo. In addition, the company operates six BJ's restaurants and six Pietro's restaurants in Oregon. BJ's restaurants offer customers moderate prices and tremendous value on an incredible menu that includes deep-dish Chicago-style pizza as well as sandwiches, salads, fabulous desserts, critically acclaimed hand-crafted beers and more. Visit Chicago Pizza & Brewery on the Web at bjsbrewhouse.com.
The information presented herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbors created thereby. The company's results may differ significantly from the results indicated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (i) the company's ability to manage growth and conversions, (ii) construction delays, (iii) restaurant and brewery industry competition and other such industry considerations, (iv) marketing and other limitations based on the company's historic concentration in Southern California and current concentration in the Northwest, (v) consumer trends, (vi) increased food costs and wages, including, without limitation, the recent increase in the minimum wage, and (vii) other general economic and regulatory conditions.
CONTACT:
Chicago Pizza & Brewery, Huntington Beach
Paul Motenko, 714/848-3747, ext. 107
KEYWORD: CALIFORNIA |
