“Bloomberg – Salt Bae Restaurant’s Owner to Start Talks on $2.5 Billion Debt“
So as a disclaimer, I’m pretty indifferent on Salt Bae. He rose to prominence last year, after the internet decided having a guy run salt through his arm hair before landing on your steak was appetizing. If that’s what the people want, then who am I to judge? I just saw this Bloomberg headline and knew immediately that I wanted to make a meme of him sprinkling coupon payment stubs on a steak, so now we have a blog post.
Anyway – it looks like Salt Bae’s restaurant, Nusr-Et, is owned by a Turkish Conglomerate, Doğuş Group, under their food and beverage subsidiary, d.ream International BV. From what I can tell, the Company has borrowed pretty heavily to bolster its international presence in the hospitality space, including restaurants. Oddly enough, the Bloomberg piece doesn’t mention why they’re looking to restructure 40% of their outstanding debt, so I’m going to infer that they’re currently dealing with an unfavorable coverage ratio. However, without the debt-fueled spending binge, NYC wouldn’t have been blessed with a Nusr-Et of our own – and what would NYC be without another overpriced, underwhelming steakhouse?
The company is looking outside the realm of restructuring to repair its balance sheet as well, including selling off assets. It recently sold a 17%, or $200M, stake in d.ream International BV to Temasek and British PE firm, Metric Capital Partners. Doğuş has also floated the idea of offloading its entire stake in d.ream International BV through an IPO, which should frighten Salt Bae. Once the public market gets its hands on a restaurant chain, the dynamic immediately switches to cost cutting and maximizing shareholder value. For a guy who built his entire brand on showmanship, quality ingredients and cachet, nothing should terrify him more than becoming the Turkish equivalent of Outback Steakhouse. So best of luck to our friend, Salt Bae, because if he doesn’t actually start raining coupon payments soon, he may be serving gimmick meals like unlimited Meze on Turkish Tuesdays, instead.