Red Lobster faces its 'most challenging time,' as big loan payment looms amid pandemic

Red Lobster is facing the “most challenging time” in its history during the coronavirus pandemic, CEO Kim Lopdrup says, at the same time that outside analysts worry about a looming $355 million loan the company has due next summer.

The privately held seafood chain of more than 700 restaurants has a $380 million term loan, with more than $355 million outstanding, reaching maturity next July, according to a June report from Moody’s, which earlier in the year cut the company’s credit rating to Caa1, defined as “poor.”

Upcoming financial events mean it is “critical to repair the balance sheet,” said John Gordon, a San Diego-based restaurant analyst.

“Most of the casual dining restaurant operations have had a very difficult time and most will have a difficult time for some considerable time going forward,” Gordon said. “I hope that Red Lobster is doubling down wherever and however they can in terms of takeout and delivery business.”