Just hours after the below news was shared, we are informed that the owner of Casual Dining Group has filed the intent to appoint administrators at the High Court.
This move gives the group ten days breathing space, prime time for it to consider all options for restructuring. Any threatened legal action from creditors will be halted for this short period. Once the ten days is complete the group can let the notice lapse, so long a viable restructuring plan is likely. The alternative, with no suitable plan lined up, is ultimately to appoint administrators.
Casual Dining Group, the owner of Italian restaurant chain, Bella Italia is in talks with creditors as it seeks a financial restructuring involving the injection of funds from its shareholders.
An insolvency process may be needed to put the business group on better terms of viability for the future, due to the negative impact left on the sector from the COVID-19 pandemic. Expected in the announcement are to be company voluntary arrangements for two of the groups three brands and the other being placed into administration. The three brands involved here include Bella Italia, Las Iguanas and Café Rouge.
Already many employees of the group have been furloughed under the Coronavirus Job Retention Scheme, implemented by the Government.
The Casual Dining Group has around 250 restaurant outlets across the UK, employing roughly 6,000 people but a number of its sites have been earmarked for closure, not re-opening after lockdown measures are relaxed. The sites not said to be closed are rather the subject of negotiations for the potential rent reductions.
KKR and Pemberton Capital Advisors have controlled the group since early 2018 when they took over from Apollo Global Management. Under new management, before the lockdown, the groups’ performance improved.
A source close to the group says that the objective of the plan and such discussions is to preserve as many jobs and restaurants as possible. AlixPartners are understood to have been appointed to work on the restructuring.
This is not the first of the restaurant sector to struggle. Prezzo and Wahaca have drafted in professional advisers to explore their financing options and Byron Burgers engaged in a formal sale process. Carluccio’s and Chiquito’s are also struggling, being unable to avoid insolvency proceedings.