Mexican restaurant chain Wahaca is the latest casual dining group to launch proposals to enter into a Company Voluntary Arrangement (CVA).
Sky News reports the proposals will include the closure of a third of its restaurants, as well as lenders and shareholders writing off £25m of debt and injecting £5m into the business to put it on a more sustainable footing.
Co-founder Mark Selby said: "I can confirm that the company has launched a CVA proposal. We have every confidence that the outcome of this will allow us to focus positively on the future by continuing with our reopening programme, as well as an ongoing dedication to our core offering of sustainable, high quality, fresh food and a fantastic customer experience – with the aim of strengthening the position of our remaining sites and returning to growth as the market recovers."
Wahaca was founded by Selby and former MasterChef champion Thomasina Miers with the first site launched in London's Covent Garden in 2007. The pair went on to win the Restaurateur of the Year – Group award at the 2016 Cateys.
However, a norovirus outbreak later that year which forced many of its sites to close and saw 200 staff and 160 diners fall ill helped push the business into the red for the first time since 2010.
Accounts filed with Companies House for the group's parent company Oaxaca for the year ended 30 June 2019 saw revenue increase from £47.9m to £50m, and slightly narrowed pre-tax losses of £4.2m, down from £4.9m the previous year.
The group confirmed the permanent closure of 10 of its sites last month due to the financial pressures faced by the business included the impact of the coronavirus shutdown, long-term increases in rents and business rates in city centres, where the majority of Wahaca restaurants are located, and the "uncertainty of the post-lockdown trading environment", which made a number of sites untenable. Wahaca has 25 sites across the UK.
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