FINANCE: Tragus, one of the UK’s largest casual dining operators, has confirmed the launch of a company voluntary arrangement.
The group said it had agreed a financial restructuring to strengthen its balance sheet and slash its debt burden from £354m to £91m.
The proposed CVA will revise the lease terms of its portfolio and refocus the business on a more profitable core state comprising principally Bella Italia and Café Rouge restaurants. It has started the sales process for 56 Strada restaurants.
Tragus outlined detailed CVA proposal documents to its creditors today. A vote on the proposals will take place on 20 June. Zolfo Cooper Corporate Finance has been appointed to run a process to identify appropriate equity sponsors for the newly independent Strada.
The group has £20m of new money committed by its new owners – conditional on the approval of the CVA, it added.
Tragus plans to open 12 Bella Italia sites in the next 12 months. More than 50 openings are expected over the next five years, subject to the successful completion of a CVA.
It expects to invest £110m of investment in the Bella Italia and Café Rouge brands over the next five years.
Tragus Group chief executive Steve Richards said: “The core of our business is strong; we have a loyal customer base and valued brands but some of these brands, such as Bella Italia and Café Rouge, require innovation and substantial investment to secure their futures. Similarly, Strada is a popular restaurant brand beloved by customers, but it needs separate attention and investment to realise its full potential.
“The plan we have announced today is crucial for reducing the group’s unsustainable level of debt, providing the right operational structure for the business and securing a strong and sustainable future for Tragus and all of our brands. We hope that creditors will accept our proposals, which will provide us with the necessary financial strength to be able to access new market opportunities and resume growth and development in our core estate to the benefit of all of our stakeholders.”
annabel.dixon@estatesgazette.com
