ZOLFO COOPER senior insolvency advisers will supervise company voluntary arrangements (CVAs) at Bella Italia and Café Rouge, after debt restructuring deals were agreed by a majority of creditors.
Peter Saville, Alastair Beveridge and Catherine Williamson of Zolfo Cooper’s Restructuring Services team will supervise the deal, agreed between restaurants owner Tragus and landlords, which reduces Tragus’ debt by £263m.
A CVA is an insolvency process where an agreement is made with creditors that reduces the company’s debt burden and sees debt repaid over a pre-determined period. Insolvency practitioners mediate and supervise the deal.
The deal sees 150 properties retained at current rents, paid monthly instead of quarterly. Rents are reduced at 60% of current levels for 19 properties, while a further 32 will have rent reduced to 50% for three months.
Where rent levels have been reduced, a compromise payment will be made to landlords.
“The CVAs were carefully designed to provide the best outcome for all stakeholders and we are delighted that the proposals have been approved by such a large number of creditors,” said Saville.
“The approval of the CVA proposals will create a more sustainable business and we are pleased to see such a high level of support from the group’s landlords. This enables Tragus to restructure its business for a sustainable future and to preserve jobs by focusing on a more profitable core estate.”
Zolfo’s corporate finance team are working with Tragus’ other restaurant company, Strada, to help secure new equity for the 56-site brand.
Paul Hemming, a corporate finance partner in Zolfo Cooper’s Advisory Services practice said: “Since we started the process earlier this month, we have had a large number of highly credible expressions of interest. We will continue the process, working towards the best outcome for all stakeholders. This should be achieved by the end of the summer.”
The fast-track move is a bold departure from the norm, as a probe would normally only begin several months after administrators had finished their own enquiries
Head of Editorial Kevin Reed looks at the week's news, including the BHS and Austin Reed administration, Accountex and much more.
MPs launch probe into the sale of BHS that will look at role of auditors and accountancy firms in sale process
A short moratorium will give struggling companies a chance to be open with their creditors and negotiate a way out of their problems transparently, says Sykes