At a recent meeting, 90% voted in favour of the scheme. However, a 28-day challenge period now follows, during which landlords can dispute the terms of the CVA.
Lomo Bidco, a new vehicle created and owned by the company’s lenders, Investec and SC Lowy, will acquire Gaucho’s 16 UK restaurants, conditional on the successful implementation of a Company Voluntary Arrangement (CVA) of Gioma (UK) Limited, the legal entity operating the Gaucho business.
The deal, announced earlier this month, saw chief executive Oliver Meakin departing, with the brand’s former managing director and founder of M Restaurants, Martin Williams “working with the key stakeholders to drive the next stage of Gaucho’s development”. Williams will continue to run M Restaurants concurrently with the new role, but is thought will look to merge the two businesses once the CVA process ends.
At the same time, it is thought that the work of putting together a new management team for the business has begun, with Ross Butler, formerly Gaucho’s director of international operations, set to return as its new managing director.
The sale is expected to complete by the end of the year following approval of the CVA.
Administrators Deloitte published their proposals for the group on Companies House this week, which showed the group owing £4m to unsecure creditors, with its secured lenders owed a total of £49m.
In its summary of the reasons for the failure of the group, Deloitte said the Gaucho brand had continued to trade well through 2017, however in the first six months of 2018 – despite sales being 2.2% ahead of 2017 – external pressures led to restaurant EBITDA margin reducing from 28.1% to 21.4%.
In respect of Cau Deloitte said “significant underperformance resulted from a number of factors including high operative costs and wider challenges in the sector”. As a result EBITDA generated by the Cau brand fell from £2.9m to £1.7m between 2016 and 2017. In the first six months of 2018 sales were 17.2% behind year-on-year.
The report confirms that despite a number of offer being received for parent company Gioma there were no bids for Cau.
This story first appeared on BigHospitality’s sister website MCA. To subscribe to its breaking news feed, click here
