KPMG brokers CVA for floundering burger chain

Gourmet burger chain Byron, which operates across 67 outlets throughout the UK, including a site in Aberdeen - and one which has already closed in Glasgow - has had a company voluntary arrangement (CVA) brokered with the assistance of KPMG in a move “designed to tackle the cost of the company’s leasehold obligations across its UK restaurant portfolio”.

The CVA centres around securing hefty discounts on rental costs, buying Byron time to close loss-making stores.

KPMG said Byron’s directors were trying to secure the company’s future amid “gathering economic headwinds”.

The company needs to secure at least 75 per cent creditor approval for its CVA after a detailed proposal document is made available to Byron’s creditors via a dedicated website today.

The creditors will vote on the CVA on 31 January 2018.

KPMG said it will spend the next two weeks in talks with creditors to ensure they understand the full detail of the proposal.

Byron operates from 67 leasehold restaurants across the UK and holds a further 9 non-operational leasehold sites including its head office in London

Will Wright, restructuring partner at KPMG and proposed ‘supervisor’ of the CVA, 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 per cent, will be paid for six months, while the company engages with landlords to agree the basis of any continued trading from these premises.”

Mr Wright continued: “As with similar CVAs, this arrangement seeks to strike a balance which provides a fair compromise to landlords, while allowing the viable part of the business to move forward across a smaller, more profitable core estate. It’s important to stress that no restaurants will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”

Simon Cope, Byron chief executive, added: “To continue serving our loyal customer base, we need to make some critical and difficult changes to the size and shape of our estate.”