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Fri 17th Jul 2020 - TowerBrook acquires Azzurri Group, 75 sites to close
TowerBrook acquires Azzurri Group, injects £70m into business, 75 sites to close: Private equity firm TowerBrook Capital Partners has acquired the Azzurri Group, the operator of ASK Italian, Zizzi and Coco Di Mama, via a pre-pack administration. Azzurri said the deal “enabled the business to restructure its balance sheet and its operations to support future success", with TowerBrook initially injecting more than £70m into the business. The deal secures the future of circa 225 restaurants, protecting 5,000 employees. However, about 75 sites will not reopen and the Pod business, which Azzurri acquired last year, will become a delivery-only brand. The closures will lead to the loss of circa 1,200 jobs. Azzurri said it would now begin to implement its “rigorous plans” to reopen an initial group of 40 ASK Italian and Zizzi restaurants next week, shortly followed by more restaurants and Coco di Mama sites later this summer. It said it was impossible to predict consumer demand following such a lengthy period of uncertainty and it would therefore reopen sites with caution, adapting appropriately to the new environment. Propel understands current expectations are for only a very tiny number of Coco di Mama sites to be impacted. Out of ASK Italian and Zizzi, the former is expected to see a higher proportion of closures. Propel revealed at the start of this month TowerBrook was leading the race to acquire Azzurri. It is thought to have beaten off competition from Epiris, which is now in exclusive talks to acquire Casual Dining Group; and current backer Bridgepoint to acquire Azzurri. TowerBrook was thought to have previously shown an interest in the business in 2014, when it was subsequently acquired by Bridgepoint for £250m. KPMG has been advising Azzurri on its options and began inviting offers for the business at the beginning of June. Azzurri said London-based TowerBrook, which is backing the existing management team, was a “long-term investor with a commitment to responsible ownership”. It has a strong track record of investing in consumer businesses, such as Phase Eight and Jimmy Choo and, in the food sector, Van Geloven, Studio Movie Grill, Wilton and KeHE Distributors. The Zizzi operator said as a result of the process, which has been completed consensually with its lending banks, the group’s debt will reduce significantly. Steve Holmes, chief executive of Azzurri Group, said: “The covid-19 crisis has had a profound impact on the casual dining sector, bringing many businesses such as ours to a standstill. Despite being a successful operator, the immediate loss of revenue during lock-down meant we have had to make some incredibly difficult decisions to protect the business for the long term. It is with deep sadness this process will result in the permanent closure of a number of sites and we must say goodbye to greatly valued employees across our brands. Looking forwards, TowerBrook is a strong new partner that shares our ambitions for the future. Its additional investment has enabled us to preserve the majority of our restaurants, stores and jobs and I am confident, under TowerBrook’s ownership, Azzurri will navigate the period ahead successfully. We look forward to welcoming customers back in the near future and to our next chapter with optimism.”

Bowling alleys to reopen but nightclubs remain shut, UKHospitality calls for targeted support for closed businesses: Casinos and bowling alleys have been given the go-ahead to reopen in August but nightclubs must stay shut, a move that has prompted UKHospitality to call for those businesses kept closed to be given extra support by the government. Live music venues were also told they could resume performances with socially distanced audiences as prime minister Boris Johnson announced his blueprint for life in the UK to return to something close to normal by Christmas. Rules on using public transport will also be relaxed, with more workers encouraged to return to offices to “give businesses confidence”. Events and conferences are also set to be allowed again from October. Pilot schemes to reopen sports stadiums with social distancing measures in place will include the World Snooker Championship, which starts in Sheffield at the end of this month. However, nightclubs and soft-play areas will have to remain closed, although Johnson said the government would try to allow more close contact between loved ones “when we can”. He added: “It is my strong and sincere hope we will be able to review the outstanding restrictions and allow a more significant return to normality from November at the earliest, possibly in time for Christmas – but we won’t proceed if doing so risks a second peak that would overwhelm the NHS.” UKHospitality chief executive Kate Nicholls said: “The reopening of additional parts of hospitality is more positive news for the sector as it looks to rebuild in the period ahead. For those businesses still unable to open, particularly nightclubs and soft play centres, there must be a road map for reopening accompanied by targeted government support that ensures they don’t suffer disproportionately while the rest of the sector welcomes back guests. The decision to allow the return of conferences, business events and stadium events in the autumn is also great news as these are intrinsically linked and vitally important to hospitality, generating significant revenue for the venues that host them and providing tens of thousands of jobs.”
UKHospitality is a Propel BeatTheVirus campaign member
BBPA calls for businesses affected by local lock-down to be compensated as councils receive new powers: Councils in England have been given new powers to force business owners to close venues in areas hit by coronavirus outbreaks. However, the British Beer & Pub Association (BBPA) has called for companies affected to be compensated. Prime minister Boris Johnson said local authorities would also be able to close public places and cancel events, while from next month the government will issue “stay-at-home orders” where there are local outbreaks. The orders would prevent people leaving defined areas and restrict public transport use until the infection rate fell. Johnson said greater powers for local authorities would enable them to “act more quickly in response to outbreaks where speed is paramount” in what he called “lightning lock-downs”. There will be a right to appeal for businesses affected and local lock-downs must be reviewed weekly. Johnson said: “Action by local councils won’t always be sufficient so next week we’ll publish draft regulations on how central government can intervene more effectively at local level. Where justified by the evidence, ministers will be able to close whole sectors or types of premises in an area, introduce local stay-at-home orders, prevent people entering or leaving defined areas, reduce the size of gatherings beyond the national defined rules or restrict transport systems serving local areas.” The BBPA said the sector was still awaiting a response to a letter sent to business secretary Alok Sharma earlier this month calling for compensation for any pub businesses subject to closure due to coronavirus following the Leicester lock-down announcement. Chief executive Emma McClarkin said: “Any closure direction must be accompanied with a compensation package to support pub businesses held in lock-down. Local pubs have already been hit hard by more than three months of closure and are only now at the start of their long road to recovery. Any further setbacks without additional financial support may lead to local pubs and local jobs being lost for good. The government can’t allow this to happen.”

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