Revolution Bars' Company Voluntary Arrangement (CVA) has been approved and will see the business exit six of its bars immediately with turnover-based rental terms agreed with seven others for the next two years.
The subsidiary of Revolution Bars Group, which operated 51 Revolution-branded bars of the wider group's 72 Revolution and Revolución de Cuba sites across the UK, proposed the CVA last month to shed underperforming, over-rented or unprofitable sites, reduce rents, "and improve the profitability and return on capital of the group over the long-term".
More than 88% of creditors voted in favour of the proposals, as a result the group estimates that its cashflows will improve over the two-year period of the CVA by approximately £4m.
The group's net bank debt is £13.5m compared to current committed bank debt facilities of £37.2m, which reduces to £29.3m at the end of March 2021 and to £28.1m at the end of June 2021. Under the terms of the CVA, £1.3m of rent and service charge arrears will be paid on 20 November 2020.
Chief financial officer Mike Foster has also indicated that he will not seek re-election at the group's upcoming annual general meeting on 22 December and will step down from the board. The group said it is intended Danielle Davies, who joined the group in July, will replace him.
Chief executive Rob Pitcher said: "I'm grateful for the support of our creditors in approving the CVA of Revolution Bars Limited providing the opportunity for the business to move forward with much greater certainty for all its stakeholders. This is a positive step in the right direction for the business.
"However, while we welcome the support government has given, the hospitality sector has been severely affected by their often illogical, inappropriate and disproportionate response to the coronavirus pandemic. To plan ahead, we still require guidance on how the sector can ultimately exit the current restrictions in a safe and timely manner. With phase one of the vaccine rollout potentially commencing in December and set to protect 99% of the UK's at-risk population, we have some potential indication of a timeline to normality which will save jobs and allow us to resume delighting our customers again.
"Throughout this pandemic the safety and welfare of our teams and our guests has remained our primary focus and I would like to recognise the integrity and determination shown by all our colleagues over the last eight months."