Food retailer Byron announces CVA proposal
Upmarket chain Byron Hamburgers Ltd has announced a company voluntary arrangement (CVA) proposal to be handled by KPMG as part of a financial restructuring that is likely to see it close up to 20 branches in a bid to cut rental costs
10 Jan 2018
Will Wright, restructuring partner at KPMG and proposed 'supervisor' of the CVA, said: ‘Over the last ten years, Byron has grown to become a stand-out name within the UK’s casual dining sector. However, in recent times, certain parts of its portfolio have not met expectations, and with gathering economic headwinds starting to impact the sector more profoundly, the directors embarked upon a strategic review of the business as a means of safeguarding its long-term future.
‘As part of this strategic review, the directors have been successful in negotiating a financial restructuring with the company’s lenders and shareholders, which will enable new investment to come into the business. Completion of this financial restructuring is conditional on the approval of today’s CVA proposal, which is designed to tackle the cost of the company’s leasehold obligations across its UK restaurant portfolio.’
Byron operates from 67 leasehold restaurants across the UK. It holds a further nine non-operational leasehold sites including its head office in London.
Wright said: ‘The CVA essentially divides this portfolio into three categories. For a total of 51 Category 1 sites, the leases will be retained at current rents. A further five Category 2 leases, have been identified as being viable at a reduced rent, equivalent to two thirds.
‘For the remaining 20 Category 3 sites, a reduced rent, equivalent to 55%, will be paid for six months, while the company engages with landlords to agree the basis of any continued trading from these premises.’
The company needs to secure at least 75% creditor approval for its CVA. A detailed proposal document has been made available to Byron’s creditors via a dedicated website, and they will vote on the CVA on 31 January 2018. KPMG says it will spend the next two weeks in talks with creditors to ensure they understand the full detail of the proposal.
In June 2013, then Chancellor George Osborne tweeted a picture of himself working late at the Treasury on the eve of the comprehensive spending review, with the caption ‘Putting final touches to the speech.’ A hamburger, fries and soft drink were clearly visible on his desk.
Osborne’s attempt to project a ‘man of the people’ image came under fire once it was established the burger meal cost £10 and had been collected from Byron’s Waterloo branch by a staff member, despite the availability of cheaper options from several nearby McDonalds.
Report by Pat Sweet