According to Bighospitality.co.uk Tasty, the owner of Wildwood and Dim T restaurants, is considering a CVA if negotiations fail with landlords following the new regulations imposed due to Covid. Tasty operates 50 Wildwood and 5 Dim T restaurants. The company has already shed 284 jobs.
The company said that it would finish its negotiations by November 2020.
So, yet again another retailer/dining group is threatening its landlords with a CVA, like the Sword of Damocles, unless it can agree terms to reduce its rents. This is becoming a common tactic where they make an announcement to sound out and soften up their landlords. There is no doubt that property to rent is not as valuable now as it was due to the pandemic, so it is only fair that landlords share some of the pain in the downturn. The controversy is really that many larger casual dining firms have taken on lots of debt, usually via their private equity owners, and so are now trying to shed liabilities. This irritates landlords a great deal, but what choice do they have at the moment? The CVA process is enshrined in the Insolvency Act 1986 as a rescue mechanism and various legal cases have strengthened its power. In essence it is still the best way to rescue an ailing company which has a high cost base that needs cutting back.
The company has also raised additional capital via its bankers, Barclays, in the form of a £1.25m loan to be paid back over 4 years
KPMG are advising Tasty.