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Fri 20th Jun 2014 - Breaking News - Tragus creditors accept CVA proposals
Tragus creditors accept CVA proposals: Café Rouge operator Tragus Group has reported the Company Voluntary Arrangements (“CVA”) initiated on 4 June 2014 have been approved by the required majority of creditors. There was strong support from landlords, who made up the largest group of unconnected creditors, with over 80% voting in favour of the terms. The CVAs will pave the way for a significant reorganisation of the business, reducing the Group’s debt burden and securing the right operational structure for the business, in order to provide the necessary capital needed to revitalise its core brands, Bella Italia and Café Rouge, and ensure a long-term sustainable future for the business. Tragus Group chief executive Steve Richards said: “We are pleased that creditors have accepted our proposals to create a more operationally efficient business. The future looks bright for Tragus and we are now able to focus on investing in and revitalising the Bella Italia and Café Rouge brands and pushing ahead with the sale of Strada. We already have plans in place to open twelve new Bella Italia restaurants over the next year and expect over fifty more restaurants to open over the next five years.” A marketing exercise has begun for Strada, with expressions of interest having already been received. It is anticipated that this will be completed by the end of the summer. The company will be left with around 200 sites and debt reduced from £362m to £90m after the restructuring. The company plans to invest £110m in the business over the next four years. A Tragus spokesman told Propel earlier this month: “The heart of the matter is Tragus had a hugely overleveraged balance sheet which has stopped investment and innovation in the brands and the group has seen profit decline over the last five years caused by a clearly defined and significant non core tail. Having said that the brands remain well-loved by customers and remain very popular and profitable, the restructure is about creating the right platform and conditions for them to grow again. To this end early trials of a new Bella and Café Rouge format have proved to be very successful and it is the intention to aggressively refresh and expand both brands. The slimmed down group will be focused on investing and growing its two brands (Bella and Rouge) substantially over the next few years. The balance sheet will be exceptionally strong (2.5 x debt to Ebitda) and the business will have access to substantial funding to grow £110m capex over four years.”
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