News

Struggling Quiznos hires financial advisers

July 10, 2011

Denver-based Quiznos has brought in a group of financial advisors from the law firm of Paul, Weiss, Rifkind, Wharton & Garrison and investment bank Moelis & Co. to help the sandwich chain navigate through a potential debt default.

According to the Wall Street Journal, negotiations are underway with creditors on Quiznos' $850 million-plus debt, and the company is considering asking a big chunk of shareholders to forgive their collective $225 million in exchange for ownership stakes.

Quiznos, owned by CCMP Capital Advisors LLC, has told lenders to anticipate a default because of struggling financial performances. Sales were down about 13 percent in May.

A 5-year restructuring plan is currently being worked on.

The company includes about 3,500 units throughout the world and released a statement saying that business will continue as usual for franchise owners, employees and stakeholders as it develops a workable financial structure.

Quiznos began scrambling for solutions in the beginning of the year, when the company laid off about 140employees.