NEW YORK — Corporate bondholders of Planet Hollywood Intl. have given a green light for the ailing restaurant chain to move forward with a restructuring unveiled last week, according to company chairman and CEO Robert Earl.
The complex plan, which entails a $30 million cash infusion, required approval by holders of at least $160 million worth of the company’s senior subordinated notes. Earl told Daily Variety he was notified Monday that the group had voted to move forward and that Orlando-based Planet Hollywood is likely to file officially for bankruptcy protection in October or November.
A total of $250 million worth of notes are outstanding. Earlier this year, Planet Hollywood defaulted on interest payments on the notes. The terms notes and bonds are used interchangeably and are part of a company’s debt.
The revamp calls for a trust belonging to Earl’s family to invest roughly $10 million in Planet Hollywood, along with big shareholders Prince Al Waleed bin Talal and Singapore billionaire Ong Beng Seng. These three parties will wind up owning 70% of the company. The prince, a nephew of Saudi Arabia’s King Fahd, announced over the weekend that his portion of the cash has been invested and that he now owns about 20% of Planet Hollywood.
Actors Sylvester Stallone, Demi Moore, Bruce Willis and Arnold Schwarzenegger were also initial investors and founders of the chain along with Earl.
As reported, the company will focus on its core locations and sell or shutter other businesses, such as ice cream parlors and sports- and music-themed restaurants and hotels. The All Star Cafe is one asset that’s sure to go, as will a handful of underperforming Planet Hollywood sites.
Planet Hollywood stock, which traded at more than $30 in 1997, last changed hands on the New York Stock Exchange at a dismal 75¢ a share. Now it’s been delisted, and the company has said it will cancel its common stock and distribute warrants. That warrants give former stockholders the right to buy newly issued common shares for the next three years at a price to be determined. But whatever the price, they will still have lost their initial investment.
Several shareholders have filed a lawsuit in Delaware chancery court against the company and the restructuring.