Multiple restaurant brands operator Chanticleer Holdings has signed a non-binding letter of intent to sell five locations of its casual dining chain Hooters in South Africa.

The total consideration of the deal is $1.065m, which is expected to result in net proceeds of approximately $360,000 to the company.

Chanticleer expects to close the transaction by the end of September this year.

Chanticleer Holdings chief financial officer Patrick Harkleroad said: “We’re pleased to have entered into a letter of intent for the sale of our five South Africa Hooters locations.

“The benefits of the transaction are numerous, including a cash infusion, improving working capital and alleviating some financial reporting complexities associated with foreign currency translation.”

Following the completion of the transaction, the company’s net working capital is expected to improve by nearly $750,000 to $900,000.

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Additionally, a 50% stake in the gambling lot of the South African Hooters business will be retained by Chanticleer.

Harkleroad added: “Importantly, we have retained a 50% interest in the gaming side of the business which should be highly profitable going forward.

“The monetisation of this asset will lead to improved operational efficiencies as we focus on our core better burger operations.”

In 2008, Chanticleer signed a stock purchase agreement with nine individual shareholders to acquire Hooters, Inc., Hooters Management Corporation and their related restaurants for about $55.1m.

Last month, Nord Bay Capital and TriArtisan Capital Advisors acquired restaurant franchisor and operator Hooters of America from HIG Capital (HIG), Chanticleer Holdings and other investors.

The deal allows HIG Capital, Chanticleer and other investors to retain a stake in the company.