business and not pay its next two quarterly dividends, the company revealed yesterday.

The pizza business -- launched in December -- is expected to cease in two weeks, said KFC (Bermuda) president and managing director Mr. Ian Paton. Mr.

Paton declined further comment. It is now known whether any jobs will be lost.

"Regrettably, the company will have to absorb considerable costs which had been incurred in connection with the expansion in Queen Street and the shareholders will not receive the quarterly dividends in September and December 1995,'' KFC (Bermuda) said.

"The directors have reluctantly concluded that it is prudent to discontinue this (pizza) product.'' The moves come after the company spent $2 million to open the pizza business and chose not to pay its regular second quarter dividend of 40 cents per share.

The company said it opted out of the June dividend to offset expansion costs.

The fast food restaurant was to have raised about $1 million through a one for five rights offering extended to existing shareholders and an additional $1 million through Bank of Bermuda financing. Offering shares were priced at $21 each.

After the fourth quarter, KFC's board of directors will review the company's ability to return to paying the regular quarterly dividend, the company said.

The expansion involved increasing the company's Queen Street restaurant operation.

When the company announced suspension of the second quarter dividend, it was reported that the directors did not foresee a disruption with the third quarter dividend.

Discontinuing the pizza operation will "enable the company management to concentrate on our chicken products which continue to be profitable in both Queen Street and Burnaby Street premises,'' the company said.

KFC (Bermuda) last traded at $25 on the Bermuda Stock Exchange on August 25, down $2.75 from the previous trade on July 16.

It is believed there are about 250,000 shares in issue.

FALLING SHARE PRICE -- Kentucky Fried Chicken shares have declined from 28.875 to $25 since the beginning of the year -- Bloomberg.

BUC