Caffè Nero CVA includes £5m 'survival' fund to keep business afloat
Shareholders in Caffè Nero have set up a £5m ‘standby fund' to keep the business afloat through the pandemic until trading returns to normal.
Sky News reports that Gerry Ford, who is the controlling shareholder in Nero Holdings, agreed to establish the package to see it through its restructuring.
The coffee chain is switching a number of its sites to turnover-based rents after creditors, including landlords, voted in favour of a company voluntary arrangement (CVA) on Monday.
The CVA was approved after the company rejected an eleventh-hour takeover bid by the Issa brothers, who own the EG Group chain of petrol stations.
The Issas had proposed paying Caffè Nero's landlords in full for rent arrears accrued during the pandemic, but the café chain said the offer was made ‘without any understanding' of its financial position.
A Caffè Nero spokesperson told The Caterer the £5m fund had always been part of the proposal.
They added: "As part of the CVA, shareholders committed to making a £5m standby fund available to the business if a CVA was approved, in case additional liquidity was needed.
"The fund, if required, would help ensure the survival of the business and protect creditors until more normal trading conditions prevail where they will benefit from the agreed turnover-based rent structure."
The coffee chain said it had modified the CVA so in that the event of a future sale to EG Group, compromised landlords will have their rent arrears paid in full.
Caffè Nero employs more than 6,000 people across 800 UK stores, many of which are located in city centres and transport hubs.