tighter management and new directors, Lines Overseas Management Ltd. (LOM) president Brian Lines said Friday.

Details of the offering and changes to the company's operations are anticipated to be revealed after a special general meeting salted January 31.

At the meeting, shareholders will vote on the $960,000 rights offering and elect an expanded board of directors.

Closely-held KFC (Bermuda) has retained LOM to underwrite the rights offering.

The offering allows existing shareholders the chance to buy one new share at $3 each for each share held..

It is understood that Bermuda Stock Exchange listed KFC (Bermuda) currently has about 320,000 shares outstanding held by about 40 shareholders.

KFC last traded September 19, 1996 at $14.375, down about 125 percent from three years ago.

Rights not taken up will likely be offered to LOM clients.

"We think it's a good price for new people coming into the company. We did put a few footnotes on it (specifically, tighter management and new directors).

"On a cash flow basis the company can do well (but) expenses are unrealistic,'' Mr. Lines said.

KFC (Bermuda) will have to control expenses, he said.

But he predicted the turnaround will be quick.

"It's our capital on the line and we think it makes sense,'' he said.

In the year ended June 30, 1996 KFC (Bermuda) had an operating loss of 90,054 despite sales of $4 million.

Equally shocking were year earlier figures when the company had an operating loss of $71,691 on sales of $4.1 million.

At the end of its 1996 fiscal year, the company had a deficit of $840,417.

One financial analyst, requesting not to be named, said raising capital will address KFC (Bermuda's) debt problem but will not fix the company's earnings problems -- the operating loss.

The company must change the way it does business if it is to be successful and turn a profit, the analyst said.

KFC (Bermuda) vice president Crayton Greene said on Friday that trading of the company's stock will remain suspended until after the special meeting.