Revolution Bars is telling creditors they must support the restructuring or face administration
- Revolution Bars had explored a sales process but rejected an approach
Revolution Bars has halted its formal sale process in attempts to progress its restructuring plans, and has warned its creditors that the group could face administration if they do not support the strategy.
The controversial catering group has written to creditors asking for their support for the plans. It says it will force a return to profitability, with Revolution Group currently expecting a statutory pre-tax loss of £15 million for the year to June 29.
The group, which operates the Revolucion de Cuba and Peach Pubs brands, rejected a takeover proposal from Nightcap earlier this week because the takeover was ‘not feasible’.
Revolution Bars says the restructuring plan will return it to profitability
Nightcap’s plan would have seen Revolution Bars initiate two separate equity fundraisings instead of the proposed £12.5 million announced in April.
Revolution Bars told shareholders on Friday that while it has received “several proposals” for the acquisition of subsidiaries or its assets, it has not yet received a takeover offer for the entire company.
It will therefore continue with its restructuring plan.
The restructuring will aim to amend and expand the guaranteed credit facilities, terminate leases at certain loss-making locations and reduce rents at other locations ‘to enable them to return to profitability at a sustainable level’.
Should the deal go ahead, it will be backed by a £3 million investment from former Pizza Express chairman and hospitality veteran Luke Johnson, and a further £6.5 million from other shareholders.
Revolution Bars said the plan will deliver a £3.8 million improvement in group-adjusted profits before the dire impact for full-year 2025.
Should the restructuring not be approved, the group forecasts an immediate funding requirement of £700,000 in the week ending 24 August and an estimated peak funding requirement of £8.1 million in the week ending 7 September.
It also urged shareholders to vote in favor of the plan and £12.5 million fundraising at the upcoming general meeting in June.
Should investors and creditors not support the move, Revolution Bars said: ‘It is expected that the directors… and certain other group entities would apply for administration to meet the obligations of their directors and to protect the interests of creditors to protect.’