Revolution Bars (LSE:RBG) - Case Update

Embattled hospitality group Revolution Bars has had its restructuring plan sanctioned by the High Court, allowing the group to avoid collapse by closing over a dozen unprofitable locations and implementing necessary rent reductions on others.

In April of this year, the company, which trades mainly under the Revolution, Revolucion de Cuba and Peach Pub brands, announced that it would be launching a formal sale process to explore whether a potential sale would provide a better outcome for stakeholders than a restructuring plan. Of the 42 parties that were invited to participate in the sale process, 32 signed an NDA, but none was ultimately willing to take on the whole of the group.

The restructuring plan was launched on 31 May. It provides for the amendment and extension of the group’s secured lending facilities, exiting the leases of certain loss-making sites, and implementing necessary rent reductions on certain other sites to enable them to return to profitability at a sustainable level. The company’s board expects the plan to deliver a significant annualised EBITDA improvement of c. £3.8 million.

In addition to the refinancing of the secured debt, the plan is facilitated by a £12.5 million firm placing, subscription, placing and open offer.

The group has not yet revealed the full list of bars to be closed, but has stated that, following completion of the plan, the business will operate 27 Revolution Bars, 15 Revolución de Cuba Bars, 22 Peach Pubs and one Founders & Co. site.

Tom Smith KC represented Revolution Bars.

Read the announcement HERE.