Chuck E. Cheese Owner Talks Equity Deal After Failed Junk Bond

Chuck E. Cheese owner CEC Entertainment is in talks with its equity investors for some $600 million to cover upcoming debt payments, after the company failed to raise cash in the junk-bond market, according to people familiar with the matter.

CEC investors, including Monarch Alternative Capital, are expected to provide the backstop to address a bond that comes due in May, said the people, who were not authorized to speak publicly. The company, which operates more than 570 restaurants globally, has also held discussions with private lenders over refinancing its debt, they said.