Boston Pizza Royalties Income Fund and Boston Pizza International (BFI), Canada’s casual dining restaurant franchisor, reorganized its top leadership and finances.

Walter James Treliving and George C. Melville, business partners for more than 46 years and BPI’s chairmen and owners, reorganized their jointly-owned assets such that Treliving will acquire 100% economic interest in BPI, while Melville will become the single largest individual owner of trust units of the fund.

“Having been involved with the Boston Pizza brand for almost 50 years, I am thrilled to continue my commitment to this business by acquiring all the outstanding shares of Boston Pizza International. Success is not achieved alone and I want to thank George for his unwavering commitment to our partnership, BPI and the fund,” said Treliving. “I see incredible potential for the continued growth of Boston Pizza, and together with our strong leadership team and committed franchisees, I am confident about our plans to lead Boston Pizza into the future.”

As part of the transition, BPI obtained new senior credit facilities of $50 million from the Bank of Montreal, Corporate Finance Division and increased its leverage by drawing down $40 million on these facilities.

The new credit facilities will be comprised of a $40 million term loan and a $10 million revolving operating facility, which will replace BPI’s existing $7.5 million revolving operating facility from the same BMO. The new credit facilities will have a term of five years and will bear interest at fixed or variable rates, as selected by BPI, comprised of either or a combination of bankers’ acceptance rates plus between 1.0% and 2.5%, depending upon debt to EBITDA ratios. The term loan will be amortized over 15 years and require quarterly payments of principal and interest. The new credit facilities will be guaranteed by some of BPI’s subsidiaries and secured by assets owned by BPI and the guarantors, and will have customary covenants usual for these types of credit facilities. The term loan will be fully advanced as part of the reorganization and will be paid to an entity owned and controlled by Melville as partial consideration for him disposing of his interest in BPI.

Following the reorganization, Treliving will be the sole owner of BPI. Melville will resign as a director and officer of BPI and will no longer be a joint actor of BPI.

The fund is a limited purpose open ended trust that earns revenue based on the franchise system sales of the 383 Boston Pizza restaurants included in the fund’s royalty pool.

BPI is Canada’s number one casual dining brand with annual gross sales in excess of $1 billion serving more than 45 million guests through over 380 mainly franchisee-operated restaurants.