Collins Completes Sale of 111 Units for Naugles Stock
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Collins Foods International Inc. said it completed the previously announced sale of 111 Kentucky Fried Chicken restaurants in Southern California to Orange-based Naugles Inc.
In exchange for the Kentucky Fried Chicken restaurants, Los Angeles-based Collins has received 23 million shares of Naugles’ newly created 32.5-cent cumulative convertible exchangeable preferred stock and a $500,000, 10% unsecured promissory note.
The transaction was completed following approval of the agreement by Naugles’ shareholders at a special meeting Sept. 30. If Collins were to convert all of the preferred stock and exercise its stock purchase warrants, its ownership of Naugles’ common stock would increase from the current 50.1% to approximately 92%.
The companies also announced that Naugles plans to redeem all $30 million principal amount of its 13.75% debentures Oct. 31 at par value plus interest. The redemption is part of a refinancing program now being undertaken by Naugles.
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