The parent company of Wagamama, The Restaurant Group (TRG), has announced extra flexibility in its banking facilities, with executive directors agreeing to take a pay cut amid the coronavirus pandemic.
The company, behind the brands of Chiquito’s and Frankie and Benny’s, said the TRG lending group has agreed that there will be no covenant test at the half year. In addition, Santander have increased its super senior revolving credit facility to Wagamama from £20m to £35m, thereby adding an extra £15m to the group’s overall debt facilities.
Also, the executive directors have decided to reduce their base salaries for a period of three months from 1 April.
Andy Hornby, chief executive, has volunteered to take a 40% pay cut, which reflects the “core policy for senior members of the TRG team who are not being furloughed”. Kirk Davis, CFO, volunteered a pay cut and will see a 20% reduction for the same period.
The smaller pay reduction for the CFO reflects the exceptional workload for the finance function. Both executive directors have also volunteered to forego their bonuses for the 2019 financial year, which were due to be paid on 31 March 2020.
In light of the “very significant” number of colleagues in TRG sites that have been furloughed and the significant pay cuts taken by the executive directors, the non-executive directors have also proposed to reduce their fees with effect from 1 April by 40%.
Hornby said: “These are unprecedented times for our business and our sector. Against this backdrop we have taken decisive action to improve our liquidity, reduce our cost base and downsize our operations. I would like to wholeheartedly thank all of my The Restaurant Group colleagues for their extraordinary understanding and commitment during this period.”