Priszm reaches forbearance and short-term financing agreement with senior debt lender

TORONTO, Jan. 19 /CNW/ - Priszm Income Fund (TSX: QSR.UN) ("Priszm" or the "Company") reported today that the Company has executed a forbearance agreement to extend the maturity date of its senior debt facility, including the payment of all interest accrued but unpaid to January 31, 2011.  In addition the senior debt lender will temporarily suspend action to exercise its remedies for the Company's defaults in respect of the existing terms of its senior debt facility.  As part of the agreement, the Company is not permitted to make payments in respect of obligations that are subordinated to the senior debt facility, other than those relating to the direct operation of the business in ordinary course. 

The senior debt lender and the Company also executed a separate short-term financing agreement that provides the Company a supplemental facility of up to $4 million to ensure the business has sufficient liquidity to continue operations while a longer-term plan is developed.  The facility bears interest of 10% per annum with a maximum one draw per week and matures January 31, 2011.

The Company remains in discussions with its senior debt lender and franchisor on various options to restructure the business which may include the sale of all assets.  The Company's interim agreement with its franchisor, YUM! Restaurants International, with respect to the franchise agreements for 70 restaurants expired on January 15, 2011 as did its interim agreement to defer unpaid continuing fees.  The Company continues to work with the two key stakeholders to come to both short and long-term resolutions that are mutually satisfactory.

About Priszm Income Fund
Priszm Income Fund (TSX: QSR.UN) holds approximately a 60 per cent interest in Priszm Limited Partnership, which owns and operates more than 400 quick service restaurants in seven provinces across Canada. The KFC, Taco Bell and Pizza Hut restaurants under Priszm serve more than one million customers a week and employ approximately 7,300 people. Approximately 100 locations are multi-branded, combining two or more of the Fund's restaurant concepts.

To find out more about Priszm Income Fund (TSX: QSR.UN), visit our website at http://www.priszm.com.

Forward-Looking Statements
Certain information in this document may constitute forward-looking statements within the meaning of securities laws that involve known and unknown risks, uncertainties, future expectations and other factors with respect to industry sector performance, business plans, activities, trends and events anticipated by the Priszm Income Fund (the "Company") and which may cause the Company's future performance and results to be materially different from those implied by the forward-looking information. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," or the negative of these terms or other comparable terminology concerning matters that are not historical facts. Forward-looking information is based on certain factors and assumptions regarding, among other things, the number of restaurants, the renewal of the franchise agreements, ability to meet capital expenditure requirements, the industry sector performance, business plans, activities, success of refinancing on commercially viable terms, trends and events anticipated by the Company. Although the Company believes that the assumptions underlying such statements are reasonable, any of the assumptions may prove to be inaccurate and, as a result, the forward-looking information may prove to be incorrect. The forward-looking information, assumptions and statements reflect the views of the Company's management with respect to future events and outcomes as of the date of this document and there should be no expectation that such information will be updated, revised and/or supplemented whether as a result of new information, changing circumstances, future events or other cause. Actual events or outcomes may be materially different and cause the performance of the Company to differ materially from any forward-looking statement.

SOURCE Priszm Income Fund

For further information:

Wilcox Group
(416) 899-4300

Profil de l'entreprise

Priszm Income Fund

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KIT Limited Partnership

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