A string of Byron burger restaurants up and down the country face closure after creditors and landlords gave the group’s restructuring plans the go ahead.
Twenty Byron outlets are at risk of being axed, including those in Bristol, Glasgow, Manchester Deansgate and Windsor – see map below.
With the high-end burger chain saddled with soaring rental costs across its sites, 99 per cent of its creditors voted in favour of the firm’s proposed restructuring plans via a company voluntary agreement today.
At risk: A string of Byron burger restaurants up and down the country face closure after creditors and landlords gave the group’s restructuring plans the go ahead
Under the CVA, Byron will be allowed to shut loss-making sites and secure hefty discounts on the rental costs of others.
Among others, restaurants in Aberdeen, Birmingham, Cardiff, Derby, Leicester, Spitalfields and Worcester could all face the chop.
Across the UK Byron has 67 operating restaurants, and nine leases on non-operational sites. It currently employs 1,800 people.
Under the proposed agreement, 51 Byron sites will see their annual rental costs remain the same, while five will be trimmed by a third and 20 will have their rents reduced by 45 per cent for six months.
As part of the sale process linked to Byron’s restructuring, investment house Three Hills Capital Partners would become the company’s biggest shareholder by snapping up half of Hutton Collins’ stake.
Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: ‘Today’s creditor vote in favour of the CVA proposal will allow Byron to conclude its previously negotiated financial restructuring and is a key step in the directors’ turnaround plan.’
WHAT IS A COMPANY VOLUNTARY ARRANGEMENT?
A company in financial trouble can, under insolvency law, enter into a company voluntary agreement.
A CVA allows stricken companies to reach an agreement with all its creditors, ie. the people or firms it owes money to, about how the money will be repaid.
Such an agreement can only be implemented via a qualified insolvency practitioner.
If 75 per cent or more of a company’s creditors agree to the proposed CVA, then it can go ahead and, potentially, lift the troubled company out of financial difficulty through a quick cash injection.
None of the 20 sites at risk of closure will be shut immediately, KPMG said.
The agreement is likely to become effective on Thursday following a shareholder meeting.
Simon Cope, chief executive of Byron, said he was pleased with the ‘strong support’ from the company’s creditors.
He said: ‘Our landlords have been both understanding and positive throughout this process and we look forward to working proactively with them in the coming months.
Chow down Chancellor: In 2013, former Chancellor George Osborne was snapped eating a Byron burger as he prepared for the Budget
‘As a result of this restructuring process, a number of our restaurants will close and we will do everything possible to redeploy staff to other sites and initiatives.
‘With the support of our new owners, Three Hills Capital, I’m confident that a new Byron can begin to take shape.
‘Byron’s brand and offer remains strong and distinctive, and with a smaller and more efficient restaurant estate we can continue to provide an outstanding burger experience for our customers and to develop and grow a sustainable and innovative business for the long term.’
Byron isn’t the only company to have been drawn into a CVA in recent times.
Jamie’s Italian, the restaurant chain founded by celebrity chef Jamie Oliver, announced earlier this month that it was seeking a CVA to help put the company on firmer financial ground.
Restaurants: Across the UK Byron has 67 operating restaurants, and nine leases on non-operational sites
Toys R Us UK successfully staved off the threat of administration in December when creditors backed its CVA plans, which triggered the loss of 800 jobs and the closure of 26 loss-making stores.
Byron’s first restaurant opened in 2007 on London’s High Street Kensington. After building a name for itself the go-to p[lace for posh burgers on the high-street, in 2013 former Chancellor George Osborne was snapped chowing down on a Byron burger while preparing for the Budget.
The burger chain was sold to private equity house Hutton Collins for £100million in 2013. In December, Three Hills Capital purchased a majority stake a Byron, proposing plans to close 13 loss-making restaurants.