Chanticleer to Build 7 Hooters in South Africa

[Parsad]

Chanticleer Holdings has partnered with Shaw Food Pty to build 7 Hooter's restaurants in South Africa...four should be ready before the 2010 World Cup next summer.  It's been tough at Chanticleer with the credit markets tightening up last year, but things are finally starting to come around.  Cheers!

 

http://sev.prnewswire.com/food-beverages/20090710/CL4473010072009-1.html

[bargainman]

So I was glancing at the lastest 10-k and it had this in it:

 

GOING CONCERN

 

At December 31, 2008 and 2007, the Company had current assets of $23,556 and $95,893; current liabilities of $686,125 and $349,268; and negative working capital of $662,569 and $253,375, respectively.  The Company incurred a loss of $1,088,588 during the year ended December 31, 2008.  The Company receives quarterly cash inflow of $25,000 from management fees and $11,500 from investment distributions, but expects quarterly cash outflow of approximately $130,000 per quarter for 2009, assuming the acquisitions discussed in Note 11 are not completed.

 

The Company expects to meet its short-term requirements through the liquidation of one investment to raise approximately $42,000 in cash; return of the advance made for the development rights of Hooters restaurants in Nevada in the remaining amount of $70,000; and loans from its CEO in the amount of $50,000.

 

The Company expects to have sufficient funding available from these sources until the possible second quarter of 2009 close of the acquisitions of HI and Texas Wings.  Subsequent to the close, the overhead requirements would be covered by distributions from the operations of HI and Texas Wings.

 

24

 

In the event the acquisitions do not close, the Company expects to have sufficient funds available to meet its requirements until May 2009, when the Company is scheduled to receive a distribution from an investment in the amount of approximately $1,275,000.  At that time, the Company plans to repay the line of credit, any other short-term borrowings and have sufficient cash to cover all overhead requirements for at least another year while increasing the funds which Advisors manages.

 

If the above events do not occur or if the Company does not raise sufficient capital, substantial doubt about the Company’s ability to continue as a going concern exists.  These consolidated financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.

 

Going to dig around a bit more, but thought I'd ask.  Does anyone know the status of these events?  In particular did their 1.275 million sale happen?

 

Also here:

 

http://www.sec.gov/Archives/edgar/data/1106838/000114420409028984/v150530_8k.htm

 

it looks like their plan to buy all of Texas Wings Hooters 45 stores was terminated.

 

On the other hand it looks like they are acquiring Hooters?

http://www.sec.gov/Archives/edgar/data/1106838/000114420409024044/v147997_10q.htm

 

On March 11, 2008, the Company entered into a Stock Purchase Agreement for the purchase of Hooters, Inc., Hooters Management Corporation and their related restaurants (collectively “HI”) from the nine current individual HI shareholders, many of whom will continue to stay involved in the ongoing operation as shareholders of Chanticleer.  The transaction is valued at approximately $55.1 million and could close in the second quarter of 2009.

 

The closing of the transaction is subject to Chanticleer raising the necessary debt and equity financing to complete the acquisition.  Chanticleer has retained an investment banking firm to assist in securing the equity capital necessary to close the proposed transaction.  Chanticleer has completed all other conditions and is in process of raising the necessary debt and equity financing to complete the transaction.  (See current status below.)

 

Looks like they recently changed from a BDC to a regular operating company.  Anyone else following this other than Parsad, who had previously said he wasn't going to comment?

[Parsad]

Also here:

 

http://www.sec.gov/Archives/edgar/data/1106838/000114420409028984/v150530_8k.htm

 

it looks like their plan to buy all of Texas Wings Hooters 45 stores was terminated.

 

On the other hand it looks like they are acquiring Hooters?

http://www.sec.gov/Archives/edgar/data/1106838/000114420409024044/v147997_10q.htm

 

To clarify on your question:

 

Hooters Inc (HI) and Texas Wings (TW) are different than Hooters of America (HOA).  Hooter's was founded by the group at "HI", which in turn sold the rights outside of Tampa, Chicago and Manhattan to "HOA".  "TW" is one of the largest, if not the largest franchisee, which purchased their rights for Texas from "HOA".  Chanticleer's acquisitions were with "HI" and "TW", but not "HOA" which the bulk of the Hooter's restaurants fall under.  The restaurants under "TW" and "HI" account for 12 of the top 20 highest-grossing Hooter's restaurants, and the average profitability of "TW" and "HI" restaurants are far above the median Hooter's restaurant.

 

Now the note that Chanticleer issued to "HOA" when former "HOA" CEO Robert Brooks was in charge, which was renewed for another year (below), gives Chanticleer the right of first refusal on any offer for "HOA".  Thus if anyone ever wants to buy "HOA", they have to go through Chanticleer first. 

 

http://www.sec.gov/Archives/edgar/data/1106838/000114420409030516/v151386_8k.htm

 

Since the note was renewed for another year at a higher rate, you can come to some conclusion on whether they have the funds to remain a going concern.  Cheers! 

 

 

[Hawk4value]

Sanjeev

 

Since the note was renewed for another year at a higher rate, you can come to some conclusion on whether they have the funds to remain a going concern.  Cheers! 

 

Do you mean that since CCLR did not call the loan they don'y really need the money and so we should not be too concerned about their ability to stay solvent until the credit markets loosen up??

 

Also, since the deals were terminated do think they could be revived again if the credit markets turn??

[Parsad]

Hi Hawk,

 

I was just clarifying how HI, TW and HOA were related to one another, and exactly which party is which, since it sounded like there was a bit of confusion in Bargainman's post.  I can't comment more on that regarding the note or the merger contracts. 

 

Suffice it to say, we aren't selling our shares and have no plans on selling them anytime soon.  Patience is often rewarded, and you sometimes have to trust the ability of management to see the process through.  That's what happened at Fairfax over the last few years, at Steak'n Shake in the last year, and we expect our managers at Chanticleer to get the job done over time.  Cheers!