Deltic Group was sold to Rekom for £10m, administration documents have revealed, after the Scandinavian firm rescued the UK's largest nightclub operator last year.
Deltic, which operates nightlife brands including Eden, Pryzm (pictured), Atik, Vinyl and Bar & Beyond, has been unable to open any of its nightclubs since March 2020 due to Covid restrictions. The company put itself up for sale in October in a bid to stay off bankruptcy.
According to administration documents, for the year ending February 2020, the group saw earnings before interest, tax, depreciation and amortisation (EBITDA) of £9m from turnover of £103m, having invested £6.7m between late 2018 and early 2019 in purchasing and rebranding three Tiger Tiger sites to the group's Eden brand. However, the new concept was not immediately successful with the three venues losing £2m in the 2020 financial year.
Following a full strategic review in September 2019, early results in January and February 2020 looked positive, with both sales and profit significantly ahead of prior year. The directors were convinced that, prior to the onset of Covid-19, the turnaround plan was working and the company was expected to deliver a strong performance for the 2021 financial year.
However, the sector was hard hit by coronavirus restrictions and the group appointed BDO in October to help it review its options and explore a sale. Deltic Group only had sufficient liquidity until mid-December and investors and the bank were unwilling to fund further losses thereafter.
With substantial creditor arrears including rent of approximately £9.4m and around £7.7m due to HMRC, and a company voluntary arrangement (CVA) not a viable option, Ryan Grant and Lee Causer of BDO were appointed as administrators on 17 December.
The deal saw Rekom acquire 42 of Deltic's 52 bars and clubs, resulting in 10 closures and 155 redundancies, but 1,300 jobs saved.
Deltic boss Peter Marks will remain as chief executive of the new organisation, which will merge with the wider Rekom Group once coronavirus restrictions on nightlife are lifted.
Rekom operates more than 130 bars and clubs in Denmark, Finland and Norway and has been backed by the Danish private equity firm CataCap since 2018.