Burger King parent Diageo last week took a step closer to spinning off the fast-food chain, announcing that it will make sure BK’s books don’t carry too much debt if it goes public.
Miami-based BK confirmed that if the QSR chain issues an IPO, U.K.-based Diageo will assure franchisees and investors that it won’t start out under a heavy load of debt. Diageo also agreed to transfer foreign BK subsidiaries in Australia, the Netherlands, and the U.K. to Burger King.
BK’s balance sheet now includes about $1 billion in debt to Diageo, which has talked about selling BK outright or doing an IPO of up to 20 percent of the company’s worth and spinning off the other 80 percent. The move is likely to come in 2002.
Most franchisees support the move to an independent BK because many have been unhappy with management under Diageo.
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