Pizza Hut’s South Korean unit set for ownership change under court supervision

Pizza Hut’s South Korean operations are acceptable to beryllium transferred to a recently created concern vehicle, according to The Korea Herald.

The determination is portion of an ongoing court-led rehabilitation process aimed astatine maintaining the marque portion limiting its indebtedness load.

Industry sources study that section backstage equity entities Kclavis Investment and Winter Gold person jointly established a caller entity, PH Korea, which has agreed to get the operating rights to Pizza Hut’s Korean concern for Won11bn ($7.6m).

The transaction is proceeding done a court-supervised mechanics that allows indispensable concern assets to beryllium transferred up of last support of the restructuring plan.

Under the proposal, the existent Pizza Hut Korea portion volition usage the merchantability proceeds to repay creditors and volition past beryllium liquidated.

The recently formed PH Korea is expected to instrumentality implicit the franchise strategy and company-run outlets.

Of the merchantability proceeds, astir Won7bn is anticipated to beryllium distributed to rehabilitation creditors erstwhile precedence claims are paid.

This would springiness creditors an estimated betterment of astir 13% of their claims, compared with little than 4% if the concern transportation had not taken place.

The restructuring effort comes much than a twelvemonth aft the existing entity applied for court-led rehabilitation successful November 2024, citing a long-running quality with franchisees and increasing fiscal pressures.

The company’s presumption deteriorated further aft the Supreme Court confirmed a ruling requiring the instrumentality of Won21.5bn successful “margin franchise fees,” referring to undisclosed markups connected supplies sold to franchise operators.

That judgement lifted full rehabilitation claims to astir Won61.5bn.

The caller PH Korea plans changes to its nett structure, logistics and marketing, and intends to simplify franchise agreements to stabilise operations.

The program does not presently impact store closures oregon large-scale redundancies.

Pizza Hut Korea said it volition taxable creditor opinions from a caller gathering to the court.

The restructuring volition determination up taxable to judicial support of the plus transfer, confirmation of the rehabilitation program and a creditors’ gathering earlier the woody is completed.

"Pizza Hut’s South Korean portion acceptable for ownership alteration nether tribunal supervision" was primitively created and published by Verdict Food Service, a GlobalData owned brand.

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