Pizza Hut and Wendy’s franchisee NPC International, which filed for Chapter 11 bankruptcy in July, is delaying a plan to auction off 900 Pizza Hut outlets after getting push back from Pizza Hut LLC, according to the Wall Street Journal.
Earlier this week, the Yum Brands division expressed concern that the sale would prompt a “group of credit-focused hedge funds” to buy the locations, the WSJ reported Thursday.
“NPC agreed to extend the deadline for bids for its 900 remaining Pizza Hut restaurants to Nov. 20 from Nov. 5 at a hearing in U.S. Bankruptcy Court in Houston on Wednesday. An auction will be held on Nov. 30 if multiple qualified bidders emerge,” the report states.
The lawyer for NPC International and Pizza Hut representatives could not be reached for comment.
Leawood, Kan.-based NPC International filed for bankruptcy protection July 1. At the time, the company operated more than 1,600 Wendy’s and Pizza Hut restaurants. In August, NPC International began the process of selling a portion of its Pizza Hut business and the closure of up to 300 restaurants after coming to an agreement with Yum Brands Inc.
NPC said the COVID-19 pandemic exacerbated the company’s existing challenges such as increased labor and commodities costs. The company is also highly leveraged.
“These challenges have been magnified recently by the impact and uncertainty of COVID-19, and we believe it is necessary to take proactive steps to strengthen our capital structure, so we have the financial flexibility to continue to adapt to current industry trends,” Jon Weber, president and CEO of NPC’s Pizza Hut division, said in July. “We also intend to use this process to continue to evaluate and optimize our restaurant portfolio so that we are best positioned to meet the needs of consumers across the country.”
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