USA | Red Robin has announced investments from JCP Investment Management and Jumana Capital into the gourmet burger restaurant chain.
Red Robin Gourmet Burgers, Inc., a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, has announced that affiliates of JCP Investment Management, LLC and Jumana Capital, LLC invested an additional USD $8.3 million into the Company, strengthening its balance sheet and demonstrating their long-term commitment to the strategy and brand.
Additionally, the Company announced the appointment of James C. Pappas and Christopher Martin to its Board of Directors, pursuant to a cooperation agreement with JCP and Jumana.
Upon Mr. Pappas' and Mr. Martin's respective appointments, the Board will expand to 10 directors, nine of whom will be independent.
"JCP's and Jumana's additional investments demonstrate their commitment and belief in the future of Red Robin," said David A. Pace, Chairman of the Board.
"We are pleased to welcome James and Chris to Red Robin's Board of Directors and look forward to their contributions and expertise as we continue to execute on our strategy for the comeback of this beloved brand. James brings significant experience in board roles at restaurant brands in similar phases of revitalisation and Chris adds both industry and financial expertise that will be important to our progress."
Pursuant to the Agreement, Pappas and Martin will be nominated by the Board to stand for election for a full term at the Company's 2025 Annual Meeting of Stockholders.
"We appreciate the dialogue we have had with Red Robin and are supportive of the Company's strategy and management team. From day one, our focus will be to help decrease debt through our investment proceeds, increased operating cash flow and the thoughtful exploration and consideration of other debt reduction options available, including the potential for selective franchising of some company-operated restaurants. Strengthening the balance sheet positions Red Robin to continue to deliver fantastic and craveable burgers every day while also building long-term shareholder value," said Pappas.
Additionally, the Company entered into an equity purchase agreement with certain affiliates of the Investor Parties pursuant to which the Company agreed to issue and sell to them an aggregate of 1,600,909 shares of the Company's common stock, at a purchase price of USD $5.19 per share, pursuant to a private placement that is exempt from registration under the Securities Act of 1933, as amended. The aggregate gross proceeds from the Private Placement are expected to be approximately USD $8.3 million. The net proceeds from the Private Placement will be used to repay indebtedness and for general corporate expenses.
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