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REG ANNOUNCES RESTRUCTURING PROPOSAL

 IRVINE, Calif., June 11 /PRNewswire/ -- The Restaurant Enterprises Group Inc. ("REG") announced that its restructuring program took a major step forward today when W. R. Grace & Co. ("Grace"), the company's controlling shareholder, made a comprehensive proposal for restructuring REG's capitalization. The new plan, which was submitted to the unofficial committee of REG bondholders, proposes an orderly transition to a restructured REG accomplished in a consensual atmosphere.
 In commenting on this new development, Norman N. Habermann, REG's president and chief executive officer, said, "By bringing another constructive recapitalization proposal to the table, we are significantly closer to the day when we can once again devote all of our energies to growing our business." He added that the new proposal, coming only three weeks after an earlier proposal from a group led by Apollo Advisors, demonstrates that major investors clearly recognize the intrinsic value of the REG business.
 As a first step in its plan, a Grace subsidiary purchased a majority of the REG common stock by exercising rights granted under previously reported agreements with certain REG management shareholders and by purchasing shares from certain other shareholders. The shareholders of REG also elected a new board of directors consisting of Grace nominees, including Norman N. Habermann, REG's president and chief executive officer.
 Grace has agreed to make available to REG a financial facility intended to provide REG with adequate liquidity to meet its operating cash needs until the restructuring process has been completed. While REG does not expect to need liquidity support, such a facility should reassure REG trade creditors and REG employees of Grace's commitment to a successful restructuring.
 REG also announced that it was making excellent progress on its conversion and divestment programs -- two previously announced strategic operating objectives. REG has passed the halfway point in its conversion of 107 family-style restaurants acquired last year from Marriott Corp. to the company's Coco's and Carrows concepts. As of today, 57 restaurants have been converted, and the conversions continue to generate sales levels approximately 50 percent higher than sales levels prior to conversion. The conversion program remains on schedule and on budget. The REG Strategic Divestment Program, which was announced in February of this year, is also proceeding aggressively. Twenty-two restaurants have been divested and 16 additional restaurants are under contract to be sold. The company has identified interested buyers for more than half of the remaining restaurants designated for divestment and is encouraged by the pace and proceeds of the divestment program.
 The Restaurant Enterprises Group Inc. operates 563 restaurants in 23 states and the District of Columbia. In addition to its family dining concepts (Coco's and Carrows) mentioned above, REG's restaurants include traditional dinnerhouses (Reuben's and Charley Brown's), Mexican dinnerhouses (El Torito and Casa Gallardo), several unique specialty dinnerhouses, and a licensing arrangement under which Coco's Japan operates or sublicenses more than 200 Coco's restaurants in Japan and South Korea.
 -0- 6/11/93
 /CONTACT: Mike Casey, executive VP and CFO of Restaurant Enterprises Group, 714-852-5763/


CO: Restaurant Enterprises Group Inc. ST: California IN: LEI SU: RCN

EH-BP -- LA017 -- 1194 06/11/93 16:10 EST
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Publication:PR Newswire
Date:Jun 11, 1993
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