Fiesta Restaurant Group, the parent company of fast casuals Taco Cabana and Pollo Tropical, has taken out a new $75 million loan with a $10 million revolving credit facility, the company announced Monday.
The new loan, which runs through 2025, replaced a previous credit agreement and is more flexible and longer-term than the other funding, Fiesta President and CEO Richard Stockinger said in a statement. Plus, it has more flexible covenants, requiring only a minimum liquidity of $20 million through 2021, he said.
It “provides ample liquidity during the remainder of this challenging period and beyond,” Stockinger said.
“We believe the progress we made in reducing total net debt from the beginning of the pandemic in mid-March combined with this new senior credit facility will enable us to exit this crisis in a much stronger financial position, poised for future growth,” he said.
Fiesta is seeing sales improvement in recent months.
Same-store sales at Pollo Tropical for the quarter ended Jan. 3 were down 8.2%, an improvement from an 11.1% decline during Q3. Taco Cabana finished Q4 with same-store sales down 10%, up from a 14.2% drop during the third quarter.
The Dallas-based brand had previously reported that its drive-thrus were seeing double-digit growth and that it is working on improving efficiency and the customer experience.
“As we did in 2020, we will continue to focus our investments on improving the customer experience in those desired channels through a number of initiatives including curbside enhancements, such as geofencing, drive-thru experience upgrades for faster ordering and payment, including digital menu boards, and ongoing app and loyalty platform improvements,” Stockinger said.