Pizza Hut’s South Korean operations are set to be transferred to a newly created investment vehicle, according to The Korea Herald.
The move is part of an ongoing court-led rehabilitation process aimed at maintaining the brand while limiting its debt load.
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Industry sources report that local private equity entities Kclavis Investment and Winter Gold have jointly established a new entity, PH Korea, which has agreed to acquire the operating rights to Pizza Hut’s Korean business for Won11bn ($7.6m).
The transaction is proceeding through a court-supervised mechanism that allows essential business assets to be transferred ahead of final approval of the restructuring plan.
Under the proposal, the current Pizza Hut Korea unit will use the sale proceeds to repay creditors and will then be liquidated.
The newly formed PH Korea is expected to take over the franchise system and company-run outlets.
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By GlobalDataOf the sale proceeds, approximately Won7bn is anticipated to be distributed to rehabilitation creditors once priority claims are paid.
This would give creditors an estimated recovery of around 13% of their claims, compared with less than 4% if the business transfer had not taken place.
The restructuring effort comes more than a year after the existing entity applied for court-led rehabilitation in November 2024, citing a long-running dispute with franchisees and growing financial pressures.
The company’s position deteriorated further after the Supreme Court confirmed a ruling requiring the return of Won21.5bn in “margin franchise fees,” referring to undisclosed markups on supplies sold to franchise operators.
That judgment lifted total rehabilitation claims to about Won61.5bn.
The new PH Korea plans changes to its profit structure, logistics and marketing, and intends to simplify franchise agreements to stabilise operations.
The plan does not currently involve store closures or large-scale redundancies.
Pizza Hut Korea said it will submit creditor opinions from a recent meeting to the court.
The restructuring will move ahead subject to judicial approval of the asset transfer, confirmation of the rehabilitation plan and a creditors’ meeting before the deal is completed.
