Tragus has successfully managed to get 90% of its creditors to agree to a CVA for its Cafe Rouge and Bella Italia Chain. The landlords have agreed to reduce the firms debt burden by £263m. Peter Saville, Alastair Beveridge and Catherine Williamson of Zolfo Cooper's Restructuring Services team will supervise the CVA.
The terms of the CVA has seen 150 properties retained at current rents, paid monthly instead of quarterly. 19 properties have been given a concession of a 60% rent reduction. A further 32 restaurants have a 50% reduction for 3 months. In addition Tragus is looking to exit leases on about 30-40 of its sites,
"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.
Tragus is also keen to sell off its Strada Chain and is currently marketing the businesses with a view to selling it or raising more equity before the end of the Summer. It is reported that the chain has received much interest.
Tragus is confident that there is profit in the brand as there are plans to launch 50 new Bella Italia restaurants over the next 5 years.
CVAs are still popular amongst retailers and restaurants as they can allow a radical restructuring of the rent liabilities. In a CVA it is possible to vacate properties and have your liabilities bound by the CVA.
Read this guide here regarding leases in a company voluntary arrangement or CVA