iNTERTAIN Limited, the owner and operator of 32 bars trading principally under the Walkabout brand, has announced plans to optimise its financial and operational structures, ensuring a long-term sustainable future for the business.
Key highlights:
- iNTERTAIN’s stakeholders have agreed a financial restructuring to strengthen the balance sheet and reduce the debt burden from £30 million to £14 million, conditional on the approval of the CVA
- iNTERTAIN Bars Limited, a subsidiary of iNTERTAIN Limited, has proposed Company Voluntary Arrangements (CVA) to revise certain lease terms and refocus the business on a smaller, more profitable core estate
- iNTERTAIN’s shareholder will commit £6 million of new money to continue its capital investment programme, conditional on the approval of the CVAs
Need to exit a number of sites – or agree new rents
iNTERTAIN’s CEO, John Leslie, commented: “Walkabout is a strong brand with a loyal customer base and most of our sites are performing well, generating a good level of return. However, a few sites are loss-making or have onerous leases, so to continue running them as they are is not viable.”
“Although we will have to exit a number of sites, our hope is that some of those that are currently not generating an acceptable return will become viable if their rents are reduced to current market levels. The most effective way to make this happen is through a CVA, which will be the least disruptive to the business and will provide the best return to landlords.”
“The plan we have announced today is crucial for reducing our level of debt, providing the right operational structure for the business and securing a strong and sustainable future for iNTERTAIN.”
“We hope that landlords will accept our proposals which will provide us with the necessary financial strength to be able to access new market opportunities and resume our investment programme to the benefit of all our stakeholders.”
Vote on proposals on 6 February
Detailed CVA proposal documents have been made available to creditors of iNTERTAIN Bars Limited today, with a vote on the proposals on 6 February 2015. iNTERTAIN has appointed Zolfo Cooper as its restructuring advisor to oversee the process and to administer the CVA.
Peter Saville, a partner at Zolfo Cooper, commented: “The Group is highly leveraged and overall performance has been adversely affected over the last two years by lack of investment and trading at certain sites, where local market conditions and unsustainable levels of rent have resulted in losses being incurred.
“Against the backdrop of a difficult trading environment we have used our knowledge of the market to advise on the options available to iNTERTAIN. CVA approval will enable the stakeholders to reposition the business for growth.”
Zolfo Cooper has consulted the British Property Federation on the Terms of the CVA in order to gain its input and ensure the interests of the landlord community are fully considered.