Tragus Group, the owner of high-street brands Café Rouge, Bella Italia and Strada, has proposed a sweeping restructuring of the one of the UK’s largest restaurant operators.
The company has announced it is proposing implementing an organisational and financial restructuring that would see its significant debts shed or restructured to ensure “a long-term sustainable future for the business”.
Under the proposed financial restructuring, Tragus aims to reduce its debt burden from £354m to £91m.
Tragus has also announced a Company Voluntary Arrangement (CVA) proposal designed to “revise lease terms, refocus the business on a smaller, more profitable core estate principally comprising of Bella Italia and Café Rouge restaurants.”
As a result, the company is looking to sell 56 Strada-branded restaurants.
Tragus Group CEO, Steve Richards, commented: “The core of our business is strong; we have a loyal customer base and valued brands but some of these brands, such as Bella Italia and Café Rouge, require innovation and substantial investment to secure their futures.
“Similarly, Strada is a popular restaurant brand beloved by customers, but it needs separate attention and investment to realise its full potential.
“The plan we have announced today is crucial for reducing the group’s unsustainable level of debt, providing the right operational structure for the business and securing a strong and sustainable future for Tragus and all of our brands.
“We hope creditors will accept our proposals, which will provide us with the necessary financial strength to be able to access new market opportunities and resume growth and development in our core estate to the benefit of all of our stakeholders.”
Zolfo Cooper has been brought in to advise Targus on its restructuring plan concerning the Café Rouge and Bella Italia brands.
Peter Saville, Alastair Beveridge and Catherine Williamson of Zolfo Cooper’s Restructuring Services team will act as Nominees for the proposed CVAs.
Saville commented: “We are very pleased to be working with Tragus on this major project to create a more efficient business, which will preserve jobs while repositioning the business for growth.
“We are optimistic that creditors will accept the proposals set out, which have been designed to provide the best outcome for all stakeholders.”