Darden to buy back $600m debt if Red Lobster sale goes through

June 30, 2014, 6:23 pm

Darden Restaurants Inc. said Monday that it has launched a tender offer for as much as $600 million of its debt, Wall Street Journal reported.

The company said the debt repurchase is subject to the completion of the sale of its Red Lobster restaurants. Darden said in May it would sell the struggling seafood chain for $2.1 billion to private-equity firm Golden Gate Capital.

The company had said it expected to use $1bn of the cash proceeds from the Red Lobster sale to retire outstanding debt. Monday’s announcement is in addition to recent disclosures that it would buy back $290 million in debt.

Those repurchases are also under the condition that the company closes the Red Lobster deal.

Darden earlier this month posted fiscal fourth-quarter results that performed below analysts’ expectations as the restaurant operator’s key chains, Red Lobster and Olive Garden, continued to deliver weak sales.

Darden also said write-downs and a savings plan unveiled in December hurt earnings.

The notes in the offer include 4.5% senior notes due 2021, 3.35% senior notes due 2022, 6%, senior notes due 2035 and 6.2% senior notes due 2017, Darden said.

Read the full news here.

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