Ruth's Chris owner to speed repayment of $20 mln federal rescue loan (updated)

Ruth's Hospitality

23/04/2020 23:29

(Adds details, background, company statement)
    By Hilary Russ
    NEW YORK, April 23 (Reuters) - Ruth's Hospitality Group Inc,
owner of the Ruth's Chris Steak House chain of restaurants, on
Thursday said it would quickly repay $20 million of federal
rescue loans it received to help maintain payroll through the
coronavirus crisis, a program aimed at small businesses.
    The announcement came after the U.S. Treasury said a highly
valued public company would have a hard time getting a
coronavirus relief loan in the next round of funding.
 urn:newsml:reuters.com:*:nL2N2CB0XB
    It also came after public pressure, with an online petition
garnering more than 260,000 signatures, asking Ruth's to give
back the money.
    Ruth's move on Thursday was first reported the Wall Street
Journal.
    A spokeswoman did not respond to requests for more details
about when the loan will now be repaid, and whether the company
would be able to keep paying healthcare and wages or would need
to seek additional financing to do so.    
    There has been widespread concern that big firms took the
loans even though they have other means of funding not available
to mom and pop shops, many of which have received nothing from
the program.
    "You're going to kill your brand," said celebrity
entrepreneur Mark Cuban said on Monday on CNBC of publicly
traded companies that sought federal Paycheck Protection Program
loans.
    Burger chain Shake Shack  SHAK.N  earlier this week became
the first public company to say it will return the funds now,
rather than pay back the loan over time.
    Instead, the New York-based corporation, valued on the stock
market at more than $1.6 billion, was able to raise $150 million
of equity capital.
    Like other public companies, Ruth's qualified for the PPP
funding.
    "Our goal was to utilize funds to keep as many of our team
members working for as long as possible, cover 100% of
healthcare benefits, and position Ruth’s Chris to rebuild its
workforce as quickly as possible," the company said in a
statement obtained by Reuters.
    It intended to pay back the loan according to government
guidelines, but decided to accelerate the repayment "as we
learned more about the funding limitations of the program and
the unintended impact."
    "We remain dedicated to protecting our hardworking team,"
the statement said. "It is our hope that these funds are loaned
to another company to protect their employees, just as we
intended."
    

 (Reporting by Hilary Russ; Editing by Sandra Maler and Diane
Craft)
 ((Hilary.Russ@thomsonreuters.com; +1 (646) 223-7381; Reuters
Messaging: hilary.russ.thomsonreuters.com@reuters.net))