The owner of the Cafe Rouge and Bella Italia restaurant chains has been rescued by its lenders in a deal that could save thousands of jobs.
Casual Dining Group – which operates about 280 mid-market restaurants in the UK with 7,500 employees – has agreed a debt-for-equity deal with US private equity giant KKR and Pemberton Asset Management.
The funds will write off some debts and pump £30m into the business, which also owns the La Tasca and Las Iguanas chains, according to reports which first appeared in The Sunday Times.
The rising costs of ingredients and drinks, higher wages and increasing business rates have put intense pressure on mid-market restaurants, which also face fierce competition from rivals as they battle for consumers’ stretched wallets.
Recent casualties in the sector have included Carluccio’s and Jamie’s Italian, which used company voluntary arrangement deals to shut outlets and win rent reductions.
According to Casual Dining Group’s last annual accounts, its pre-tax losses widened last year, despite revenue rising by 10pc to £329m.
In July last year, the company refinanced £185m of credit facilities with its lenders.
The business has also drawn loans of £35m from shareholders over the past year and a half.
See more at: https://uk.finance.yahoo.com/news/cafe-rouge-parent-rescued-lenders-202417019.html