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Sun 13th Sep 2020 - Côte exploring options, restaurants predict mass evictions as moratorium ends
Côte exploring its options, eyes debt-for-equity swap deal: Côte, the circa 100-strong French brasserie chain backed by BC Partners, has appointed advisors to explore its options, including a possible debt-for-equity swap deal. Propel understands the Alex Scrimgeour-led brand is working with advisors FTI Consulting on its options, which could include a sale of the chain, after the coronavirus, in line with the wider sector, has had a “significant impact on the business”. The Sunday Telegraph reported the company, which BC Partners acquired for £250m from CBPE Capital in 2015, is in talks to offload the chain to debt holders, Partners Group, in a debt-for-equity deal. In 2017, Partners Group, the global private markets investment manager, acquired a substantial minority stake in Green Tea Restaurant, a leading Chinese casual dining restaurant chain. A Cote spokesman told Propel: “Prior to lock-down, Côte was trading well with record sales and strong Ebitda growth in the past financial year. In common with the wider restaurant sector, the coronavirus has had a significant impact on the business which has only been partially mitigated by the successful launch of Côte-at-Home. As a result, FTI has been appointed to explore different options, which could include a sale of the business, to support Côte’s next stage of growth.” Côte, which was founded in 2007, has so far reopened circa 80 of its sites, with a further ten set to reopen this week in Battersea Rise, Barbican, Birmingham, Covent Garden, Maidstone, Marlow, Manchester, Soho, Islington and Fulham. It is thought it may look to exit a small number of sites. In April, the company launched its Côte-at-Home delivery option, which it said would “bring the best of our kitchen to your home”. Côte-at-Home is now available nationwide and in June the company converted a newly acquired warehouse space into a refrigerated order fulfilment warehouse solely to cope with new demand for the offer. During the summer, it also launched its first click and collect option, with OrderSwift, through selected sites. 

Restaurants predict mass evictions as moratorium ends: The bosses of Burger King, Itsu, Shake Shack and other restaurants with about 600 UK sites are urging prime minister Boris Johnson to extend the ban on commercial evictions, or risk widespread closures and redundancies. They claim about 30% of landlords in their experience have “indicated their intention to evict, issue final demands for full payment or otherwise indicated they will not support any restructure of covid-19-incurred rent debt”, The Sunday Telegraph reported. Backed by Deliveroo, they want the government to extend the moratorium for businesses in city centres, arguing restaurants and cafes are still starved of office workers, and automatically ban commercial evictions in areas where local lock-downs are introduced. They also want the government to prevent landlords demanding full payment of rent arrears on 1 October, and discourage evictions by amending the terms of business rate relief on empty properties. “The expectation of some landlords that past debts can be immediately claimed and eviction proceedings commenced if there is a failure to pay is an unmanageable challenge,” they wrote. The signatories include Will Shu, founder and chief executive of Deliveroo; Alasdair Murdoch, UK chief executive of Burger King; and Calum Ferguson, UK business director of Shake Shack. The proposals are likely to stoke controversy among landlords, who argue the ban on evictions has caused a minority of tenants to withhold rent, despite being able to afford to pay. Landlords and tenants have called on the government to pay 50% of commercial rents. A government spokesman said: “We recognise the huge challenges faced by commercial tenants and landlords during this period, and we’re working closely with them to ensure they are supported.”

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