Prison-Food Vendor TKC Selling $305 Million Loan to Fund Payout

TKC Holdings Inc., a prison-food vendor that has struggled with debt sales in the past due to investor concerns about businesses tied to mass incarceration, is selling a $305 million loan to fund a payout to shareholders.

The company, owned by private-equity firm HIG Capital LLC, launched the five-year loan Monday. It’s structured as a “payment-in-kind” deal where the company can choose to pay the interest in cash or more debt, according to a person with knowledge of the matter.

A lender call for the deal will be held on Tuesday at 10 a.m. New York time, said ...