Restaurant and bar group Drake and Morgan has announced that it intends to enter a company voluntary arrangement (CVA).
The decision follows a strategic review of the business, which found that action was needed for the company to continue trading and secure the long-term future of the business.
In turn, proposals have been made seeking the support of landlords that will be paired with creditor backing to keep the group afloat.
However, three of Drake and Morgan’s 22-site portfolio will be forced to close, with all affected staff members offered alternative roles within the company.
Jillian MacLead, founder and CEO at the group, said: “We started last year as a profitable and growing business and, in common with the rest of the hospitality industry, have been significantly affected by repeated lockdowns and tier restrictions.
“This course of action, if approved, will safeguard the future of the group and give it the breathing space it needs to recover.”
Two partners at Deloitte have been appointed by Drake and Morgan to advise on the CVA.
Gavin Maher, a partner at the Big Four firm, said: “The CVA will allow flexibility in this period of uncertain trading by moving to a predominantly turnover-based rent model for its duration.
“Drake and Morgan was a successful business prior to Covid-19 and this action will enable the business to emerge strongly from the pandemic.”