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American Restaurant Group to Sell 4 Units to Cut Debt

Eateries: The Newport Beach operator of Black Angus will transfer the divisions to an entity controlled by its CEO.


American Restaurant Group Inc. said Tuesday it will sell four of its restaurant subsidiaries for as much as $25 million to reduce debts, while retaining its Stuart Anderson's Black Angus eateries.

The Newport Beach-based company, which earlier tried to unload the Black Angus chain to ease debt, says it agreed to sell Grandy's Inc., Spoons Restaurants Inc., Local Favorite Inc. and Spectrum Foods Inc.

Spectrum Foods operates a variety of restaurants, including Prego, Tutto Mare and Harry's Bar and American Grill. Local Favorite operates National Sports Grill eateries.

The chains will be sold to NBACo Inc. (Non-Black Angus Concepts), a Newport Beach entity formed to handle this transaction. Anwar Soliman, American Restaurant Group's chief executive, is the principal shareholder of NBACo.

"It's basically just a separation of the restaurant divisions," said Ken Di Lillo, American Restaurant Group's vice president--finance. After the transaction, Soliman will remain on American Restaurant's board, the company said, but it was not clear whether he will retain the chief executive position.

As part of the transaction, American Restaurant said it will assume certain obligations of the subsidiaries being sold, including leases of closed restaurants. The transaction is expected to be completed this quarter.

The sale is the latest step American Restaurant has taken to deal with debt.

In 1997, the company said it had agreed to sell its 101 Black Angus steakhouses to Florida-based investors, but that deal fell through because of lack of support from creditors.

After that, the company hired financial advisors to help refinance $172 million in debt stemming from a 1980s leveraged buyout of the restaurant company by a management team led by Soliman.

In 1998, the company sold $190 million worth of bonds and preferred stock rights to refinance its debt. It said then that the refinancing and a new $15-million credit line would allow it to resume expansion of Black Angus, Spoons, Grandy's and National Sports Grill restaurants.

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