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Thu 21st Mar 2019 - Creditors approve Ed’s and Giraffe CVA
Creditors approve Ed’s and Giraffe CVA: Creditors of Giraffe Concepts, the operator of the Ed’s Easy Diner and Giraffe restaurant brands, have approved its proposed company voluntary arrangement (CVA). Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “This is a critical step forward for the business, allowing Giraffe Concepts to complete its financial restructuring plan and embark on a comprehensive operational transformation programme.” Paul Berkovi, director at KPMG, added: “The vote saw a significant majority of all voting creditors choosing to approve the CVA, surpassing the 75% total required in order to pass the resolution.” It comes after Propel exclusively revealed earlier this month Ed’s Easy Diner and Giraffe, which are owned by Boparan Restaurant Group, would undergo a restructure. The CVA document put together by KPMG revealed Ed’s Easy Diner and Giraffe have been experiencing a consistent decline in profitability and management forecasts indicated Giraffe Concepts would be unable to trade within the limits of its banking facilities after this month’s rent quarter date without significant new investment. The CVA document put together by KMPG stated: “While from FY17 to FY18 there was a significant improvement in the level of like-for-like sales decline in both the Giraffe and Ed’s Easy Diner brands, despite continued investment from the shareholder, the business has been experiencing a consistent decline in profitability. Based on historic trends, this Ebitda trajectory will continue if further investment is not made in the core estate and this will, in turn, put further downward pressure on the business and result in the company continuing to have insufficient funds to continue to trade beyond 25 March 2019 without further debt or equity funding.” The document showed for the FY17 the two brands generated turnover of £67.1m, but a negative Ebitda of circa £3m. For FY18, turnover is set to have declined to £61.7m, while negative Ebitda is set to be circa £3.63m. The company said it would close 27 of the brands’ 87 restaurants under the proposed agreement with landlords, whilst rent reductions were being sought on a further 13 sites. It has obtained £6.5m of additional funding from a related undertaking of Boparan Group, Amber REI Holdings (AREIL), which was subject to obtaining the compromises and arrangements set out in the CVA proposal. AREIL has, to date, provided approximately £27m of unsecured funding to cover initial acquisition costs, trading losses and capex requirements. The CVA document stated without this funding, the company would have been unable to make critical payments and to continue to trade as a going concern.


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