CEC Entertainment, the Irving-based parent company of Chuck E. Cheese and Peter Piper Pizza, is in talks with lenders to raise funds to avoid bankruptcy, according to a the Wall Street newspaper report who quoted people familiar with the matter.
The children’s restaurant and entertainment chain faces a quarterly loan payment of $ 2 million at the end of the month and has approximately $ 1 billion in debt.
To keep its management team intact, the company is granting retention compensation to 28 employees, according to a regulatory filing last week. CEO David McKillips, Chairman J. Roger Cardinale and CFO James Howell will collectively receive nearly $ 3 million, according to the filing.
Payments are for 12 months or 30 days following a restructuring, whichever comes first. Cardinale’s agreement is until September 30.
The company reported nearly $ 1 billion in debt on its balance sheet at the end of last year. He has approached lenders in recent weeks to assess their interest in providing a $ 200 million loan to fund it as part of a bankruptcy reorganization, The Wall Street Journal reported. Lenders and bondholders look to strike a deal while CEC reopens locations closed during COVID-19 shutdown.
The CEC has not publicly disclosed any restructuring or bankruptcy plans.
The company was founded as ShowBiz Pizza Place but changed its name in 1998. It has more than 600 Chuck E. Cheese and 120 Peter Piper Pizza locations in 47 states and 16 countries and territories. There are 66 locations in Texas.
Its 2019 revenue topped $ 900 million, with food and beverage sales accounting for nearly 44% of that, the company said in its Annual Report.