WILBRAHAM, Mass.–(BUSINESS WIRE)–Friendly Ice Cream Corporation (AMEX: FRN – news) today announced the successful completion of its financial restructuring plan. The restructuring involves the refinancing of the Company’s $76 million existing bank credit facility, which includes the revolving credit loan, term loans and letters of credit, and the repurchase of approximately $21 million in aggregate principle amount of its 10 1/2% Senior Notes due 2007.

The Company’s new financing consists of three principal components: (1) $55 million in long-term mortgage financing with GE Capital Franchise Finance Corporation which will be secured by 75 of the Company’s restaurants, (2) $34.5 million in financing from a sale and leaseback arrangement with a real estate investment trust involving 45 of the Company’s restaurants and (3) a $30 million three year revolving credit facility of which up to $20 million will be available to support commercial letters of credit with the remainder available to provide working capital and for other corporate needs. Fleet Bank lead the revolving credit facility transaction and will serve as agent.

The refinancing has improved the Company’s financial profile by reducing total debt by approximately $30 million and by extending the average life of the Company’s debt. The combined impact of these transactions is expected to generate a one-time after-tax benefit of approximately $0.7 million, or $0.09 per share, to be recorded in the fourth quarter of fiscal 2001.

Paul Hoagland, Chief Financial Officer, stated, “We are pleased at the response of our bondholders to the tender offer that allowed us to complete the refinancing plan. Compared with the bank credit facility that we replaced, the new financing facilities better accommodate our strategic business plan.”

Bank of America Securities (BAS) was the Company’s exclusive dealer manager and solicitation agent on the tender offer. Earlier this week, the Company announced the results of its “Dutch Auction” tender offer for a portion of its outstanding 10 1/2% Senior Notes due 2007, which expired December 14, 2001 as scheduled. A total of $21,273,000 principal amount of notes tendered was accepted by the Company at a price of $800 per $1,000.

Friendly Ice Cream Corporation currently has operations in 17 states composed of 393 company restaurants, 161 franchised restaurants and 6 franchised cafes with a high concentration in the Northeast. Friendly’s offers its customers a unique dining experience by serving a variety of high-quality, reasonably-priced breakfast, lunch and dinner items, as well as its signature frozen desserts, in a fun neighborhood setting. Additional information on Friendly Ice Cream Corporation can be found on the Company’s website (www.friendlys.com).

SOURCE: Friendly Ice Cream Corporation