31 July 2020
Sky News reports that Byron Burgers will be sold to Calveton UK as part of a pre-pack administration. KPMG have been appointed to see this pre-pack through.
Only 20 of its total 51 restaurants will transfer to the new owner, as part of the rescue deal and just 550 of its 1,200 employees will be saved.
Byrons situation is the latest example of the distress being faced by the UK restaurant sector due to COVID-19. Byron faced difficulty in accessing financial support under the Government's emergency loan schemes and was hit by the muddled reopening guidelines, the prospect of a second wave of the coronavirus pandemic and the restraints imposed by social distancing.
29 June 2020
Update; Byron Burger has filed a notice of intention to appoint administrators today according to reports by Sky News. This should give the company a maximum of 20 days to find a buyer or alternative finance to save the business. It is understood that there are 3 potential bidders. It is likely that the business will be sold in a pre pack administration
Byron Burgers has called in advisors from KPMG to see how it can survive the Covid-19 crisis according to reports.
The burger chain has a turnover of more than £45m but does not have a good credit rating, As such it is not eligible for the £330bn Covid Corporate Finance Facility established to provide cheap loans for larger businesses.
The company completed its Company Voluntary Arrangement that allowed it to cut its stores to just 51 but it still employs 1,200 people. The CVA was also done by KPMG who have become experts at retail CVAs.
The company is hoping to "Furlough" all its employees, the majority of which will be earning around the average wage, but it will still need to find some money to top up beyond the 80% of the wages that is covered.
Simon Wilkinson, Byron's chief excecutive, said: "In common with most businesses in the sector we are actively exploring the recently announced government support initiatives and have engaged KPMG to help with this."
To be honest, any business at the moment in the casual dining sector is in a perilous position. It is unlikely that they will all survive. Those with weak credit ratings or too much borrowing are going to be the first to go. The Government will not be able to help all businesses.