The Cheesecake Factory Inc. on Tuesday said it has entered into a new revolving credit facility that will allow for more flexibility and a lower cost of capital as the company prepares to relaunch growth next year.
In addition, the Calabasas Hills, Calif.-based casual-dining chain said it has paid off remaining debt on its prior credit facility, while maintaining a cash balance of about $50 million.
The new unsecured, five-year facility, which matures on Dec. 3, 2015, has a commitment of $200 million with an increase feature that could provide another $50 million in borrowing capacity.
The move expands the company’s ability to make share repurchases and grant dividends, the company said. It also doubles the permitted acquisition consideration to $500 million, and allows for an incremental $200 million of subordinated debt and reduces interest rates and fees.
David Overton, Cheesecake Factory Inc. chairman and chief executive, said: “We made tremendous strides strengthening our balance sheet during the past two years. Our consistent and robust cash flow enabled us to pay down the entire $275 million previously outstanding on our credit line in just 21 months. With the new facility in place, our liquidity and capital structure are even stronger and more flexible, and we are well positioned to pursue our strategy to accelerate growth in 2011 and beyond.”
The Cheesecake Factory Inc. operates 163 restaurants under the Cheesecake Factory and Grand Lux Café brands, as well as one RockSugar Pan Asian Kitchen.
Contact Lisa Jennings at [email protected].
