BRG has appointed KPMG to oversee its CVA deal which if approved will see the group reduce its portfolio and seek rent reductions at other sites.
The company currently holds 70 sites, of which 13 would see a rent reduction under the terms of the CVA, and a further 27 would face closure. The proposed supervisors of the CVA are Will Wright and David Costley-Wood from KPMG’s Restructuring practice.
Giraffe Concepts needs to secure at least 75% creditor approval for the CVA for it to proceed. A detailed proposal document is expected to be made available to creditors via a dedicated website today (4 March). The creditors will vote on the CVA on 21 March 2019. KPMG will spend the coming weeks in talks with creditors to ensure they understand the full detail of the proposal.
Tom Crowley, chief executive of BRG, said: “We have been examining options for the two brands for some time and the CVA is the only option to protect the company. The combination of increasing costs and over-supply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face.”
Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, added: “This CVA seeks to address the cost of the company’s leasehold obligations across a number of unprofitable sites, and if successful, will put the business on a surer financial footing.
“Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder.”