Ping Pong Limited

A popular London restaurant chain has entered administration after some of its landlords took a hardline approach and refused to grant any concessions for rental arrears accrued over the pandemic.

Ping Pong Limited operated a chain of Chinese Dim Sum restaurants in prime central London locations. The company opened its first site in Soho in 2005, expanding to 13 restaurants at its peak. Following a rationalisation process in 2019 and the closure of a further restaurant in October 2022, the company operated from six restaurants in London, along with a central production kitchen.

The company had 225 employees, and previously had a run rate turnover of circa £13m-£14m. However, the onset of the Covid-19 pandemic, related lockdowns and mandatory closures caused significant disruption to the business.

The company survived the pandemic, but many of its employees returned to their home countries and decided not to return to the UK post-pandemic. Supply chain issues and rising costs also put growing pressure on the company’s margins after its restaurants reopened.

During the pandemic, the company also accrued significant levels of rent arrears. Subsequent to the reopening of the economy, the directors sought to negotiate concessions with landlords. Constructive discussions were held in most cases, with appropriate concessions agreed with five restaurant landlords. The company also negotiated an exit from one of its leases.

Unfortunately, however, certain landlords took a firm position. One landlord at a site where arrears amounted to over £900k took the position that it would accept nothing less than the full rent with no concessions, failing which it threatened to present a winding-up petition against the company. Agreements could also not be reached for two other sites where combined arrears amounted to circa £600k.

Although the directors were able to agree a payment plan with one of the landlords in late October, it was concluded that the company would not be able to adhere to the level of payments required to settle the full balance of the historic arrears.

It was determined that a pre-pack sale following an accelerated marketing process would maximise value for the company’s creditors, and Roland Cramp MRICS of Hilco Valuation Services undertook a sale process.

One bid from AJT Dimsum Limited was received by the deadline of 8 November, which culminated in a final offer of £3,210,000 being accepted.

Asher Miller and Stephen Katz of Begbies Traynor were appointed Joint Administrators on 18 November, and the sale was completed on the same day. All of the company’s employees were transferred to the purchaser.

The Joint Administrators were assisted by solicitors from Howard Kennedy.

Their Proposals can be found HERE.