- Revolution Bars had been exploring a sales process but rejected approaches
Revolution Bars has called time on its formal sales process in an effort to press ahead with its restructuring plans, warning its creditors that the group faces administration if they do not back the strategy.
The embattled hotel group has written to creditors asking for their support of the plans. He says it will force a return to profitability, with Revolution Group currently projecting a pre-tax statutory loss of £15m for the year to June 29.
The group, which operates the Revolución de Cuba and Peach Pubs brands, rejected a proposed takeover from Nightcap earlier this week on the grounds that the acquisition was “incapable of consummation”.
Revolution Bars says its restructuring plan will return it to profitability
Nightcap’s plan would have seen Revolution Bars launch two separate equity fundraisings instead of the suggested £12.5m announced in April.
Revolution Bars told shareholders on Friday that while it had received “several proposals” for the acquisition of subsidiaries or their assets, it had not received a takeover offer for the entire company.
Therefore, it will continue with its restructuring plan.
The restructuring will seek the modification and extension of its secured credit facilities, an exit from leases at certain loss-making sites and a rent reduction at other sites “to enable them to return to profitability at a sustainable level”.
If the deal goes ahead, it will be backed by a £3m investment from former Pizza Express chairman and hospitality veteran Luke Johnson, and a further £6.5m from other shareholders.
Revolution Bars said the plan will lead to a £3.8m improvement in the group’s adjusted profits before unpleasantries for the full year 2025.
Should the restructuring not be approved, the group anticipates an immediate funding need of £700,000 in the week ending 24 August and an estimated peak funding need of £8.1 million in the week ending 7 of September.
It also urged shareholders to vote in favor of the plan and the £12.5m fundraising at its upcoming general meeting in June.
Should investors and creditors fail to back the move, Revolution Bars said: “It is expected that the directors… and certain other group entities would apply for administration to discharge their directors’ obligations and protect the interests of creditors.” “.