BurgerFi International Inc. (NASDAQ:BFI) shares are rising on Monday, after the company announced it had secured interim court approval for $3.5 million in financing. This funding is a critical lifeline as BurgerFi navigates its Chapter 11 restructuring process, aiming to keep the doors open at its 144 locations across the country.
What To Know: The financing, provided by an affiliate of TREW Capital Management, is part of a debtor-in-possession (DIP) loan designed to give the company the liquidity necessary to stabilize operations and continue serving customers without interruption. The court also approved BurgerFi's request to maintain existing employee benefits, cash management systems and customer programs, further ensuring that daily operations will proceed smoothly during the restructuring period.
"This is a major milestone for us," said Carl Bachmann, CEO of BurgerFi International. "Our goal throughout this process has been to ensure that our employees, customers and franchise partners feel no impact from the transition into Chapter 11. With this approval, we have the financial backing to continue operating without disruption."
In addition to the interim financing, BurgerFi plans to pursue a sale process with the backing of its lenders. The court is scheduled to hold a "second day" hearing on October 7 2024, where the company will seek final approval of its restructuring proposals.
The company's restructuring efforts also include leadership changes, as David Heidecorn recently stepped down from his role as Chairman and an independent member of the Board of Directors. Despite the challenges, BurgerFi remains committed to its long-term strategy and continues to explore new avenues for growth through its brands—BurgerFi and Anthony's Coal Fired Pizza & Wings.
What Else: Chief Restructuring Officer Jeremy Rosenthal noted that the approval of the DIP financing gives the company the ability to meet its operational needs, including ongoing relationships with vendors and landlords. "We now have the liquidity for operations at BurgerFi and Anthony's to continue as usual," Rosenthal said.
BurgerFi, which filed for Chapter 11 bankruptcy protection on September 11 2024, operates 93 BurgerFi locations and 51 Anthony's Coal Fired Pizza & Wings restaurants. The company is known for its commitment to high-quality, fresh ingredients, including 100% American Angus Beef free of steroids, antibiotics and hormones.
BFI Price Action: BurgerFi International shares were up by 89.4% at 22 cents according to Benzinga Pro.
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