Mexican restaurant group Chilango has confirmed plans to enter a Company Voluntary Agreement (CVA) to remain in operation, blaming ‘significant changes' in the market for the move.
The proposed CVA would see it exit non-trading leases, renegotiate rents with landlords and restructure to reduce company debt as well as improving earnings before interest, tax, depreciation and amortisation (EBITDA) and cash flow.
Chilango co-founders Eric Partaker and Dan Houghton said: "Chilango remains profitable at the restaurant-level, however in recent years the market in which we operate has changed significantly.
"This proposal allows us to make important changes so we can support our stakeholders and continue serving our loyal guests. We are proud of the strong brand and passionate following our teams have created and look forward to the future."
The move follows the company's crowdfunding scheme ‘burrito bonds' which raised more than £3.7m over the last 12 months to expand the chain. It is not clear how the CVA will affect the mini-bond investors.
In its latest set of accounts made up to 25 March 2018, Mucho Mas the parent company of Chilango, revealed a loss of £1.4m.