Arazim Investment (TASE: AZRM) has found a new tenant for the UK roadside restaurants previously leased to financially troubled Little Chef. Jessops Restaurants Ltd. (LSE:JSP) has acquired Little Chef and undertaken to meet all of its liabilities, including and rent payments to Arazim.
Arazim bought Little Chef restaurants in a NIS 594 million buy and lease-back deal in February 2006. The properties included roadside restaurants and a 56-room hotel, which Little Chef would rent for 35 years.
Under the deal with Jessops Restaurants, Arazim has guaranteed NIS 8 million revenue in the first quarter of 2007. Arazim was given an 18-month option to buy from Jessops Restaurants the operation of Little Chef for ₤5 million. As a real estate holding company, Arazim has no intention of operating Little Chef, but might try to benefit from a rise in value of the chain and sell it at a higher price than the exercise price.
Arazim CEO Tali Yaron-Aldar said, “We’ve received an option to operate the entire chain, which has 193 properties, of which we own 62, because we expect the chain to succeed, and we can benefit by selling the option.”
Published by Globes [online], Israel business news - www.globes.co.il - on February 4, 2007
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