Revolution tells collectors: Back restructuring or face administration
- Revolution Bars had been exploring a sale process but rejected approaches
Revolution Bars has called time on its formal sales process in efforts to move ahead with its restructuring plans, warning its creditors the group faces administration if they do not back the strategy.
The embattled hospitality group has written to creditors calling for their support for the plans. It says will force a return to profitability, with Revolution Group currently projecting a statutory pre-tax loss of £15million for the year to 29 June.
The group, which operates the Revolucion de Cuba and Peach Pubs brands, rejected a takeover proposal from Nightcap earlier this week on the grounds the takeover was ‘incapable of being delivered’.
Revolution Bars says its restructuring plan will return it to profitability
Nightcap’s plan would have seen Revolution Bars initiate two separate equity fundraisings instead of the suggested £12.5million 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 had not received a takeover offer for the entire company.
It will therefore go ahead with its restructuring plan.
The restructuring will seek the amendment and extension of its secured lending facilities, an exit from leases on certain loss-making sites, and a rent reduction on other sites ‘to enable them to return to profitability at a sustainable level’.
Should the deal go ahead, it will be supported by a £3million investment from former Pizza Express chair and hospitality veteran Luke Johnson, and an additional £6.5million from other shareholders.
Revolution Bars said the plan will lead to a £3.8million improvement in group adjusted earnings before nasties for full-year 2025.
Should the restructuring not be sanctioned, the group is forecasting an immediate £700,000 funding requirement in the week ending 24 August and an estimated peak funding requirement of £8.1million in the week ending 7 September.
It also urged shareholders to vote in favour of the plan and the £12.5million fundraising at its upcoming June general meeting.
Should investors and creditors not back the move, Revolution Bars said: ‘It is expected the directors… and certain other group entities would file for administration to comply with their directors’ duties obligations and to protect the interests of creditors.’
