The process will leave the group, which placed its Strada brand on the market earlier this month, with an estate of c190 sites. There will now be “challenge” period of a month, before the company will look to progress with its refinancing and investment plans.
The group said the CVA had been approved by the required majority of creditors and there was strong support from landlords, who made up the largest group of unconnected creditors, with over 80% voting in favour of the terms.
It also said that expressions of interest had already been received for the rump of the Strada estate, which is valued at £40m.
The company said that CVAs will pave the way for a significant reorganisation of the business, reducing the group’s debt burden and securing the right operational structure for the business, in order to provide the “necessary capital needed to revitalise its core brands, Bella Italia and Café Rouge, and ensure a long-term sustainable future for the business”.
Tragus chief executive Steve Richards said: “We are pleased that creditors have accepted our proposals to create a more operationally efficient business. The future looks bright for Tragus and we are now able to focus on investing in and revitalising the Bella Italia and Café Rouge brands and pushing ahead with the sale of Strada. We already have plans in place to open twelve new Bella Italia restaurants over the next year and expect over 50 more restaurants to open over the next five years.”
The approval of the CVA comes despite speculation that some landlords were looking to retain a number of sites.
New owner Apollo has commited £20m to secure a long-term future for Tragus, which was conditional on the approval of the CVA.
The company is now set to go ahead with plans to open 12 Bella Italia sites in the next 12 months, with more than 50 openings expected over the next five years.
In total £110m of investment is expected in Bella Italia and Café Rouge over the next five years.
The group confirmed it had agreed a financial restructuring to strengthen the balance sheet and reduce its debt burden from £354m to £91m at the start of the month.
Zolfo Cooper Corporate Finance has been appointed to run a process to identify appropriate equity sponsors for the newly independent Strada and it is anticipated that this will be completed by the end of the summer.
Peter Saville, Alastair Beveridge and Catherine Williamson of Zolfo Cooper’s Restructuring Services team have been appointed as Joint Supervisors of the Company Voluntary Arrangements (CVAs) of Bella Italia Restaurants Limited, Café Rouge Limited and Café Rouge Restaurants Limited following approval of the proposals by the required majority of creditors.