The decision to initiate the CVA was announced by the restaurant chain’s parent company Famous Brands. It will be carried out with the assistance of Grant Thornton.
The process aims to ensure “financial viability and the sustainability of the business into the future”, says Famous Brands’ statement.
“Whilst this process evolves, shareholders will be updated when appropriate and are requested to continue to exercise caution in the trading of Famous Brands shares.”
The burger chain, which earlier this week was forced to apologise for its distasteful “curry wars” advertising campaign, made an operating loss of £2.6m in the six months up to 31 August, compared to £680,000 the previous year, according to Famous Brands.
The parent company also said that like-for-like sales fell 10.6% in the 22 weeks to 29 July 2018, compared to a 2.6% decline in 2017.
When Famous Brands bought GBK for £120m in 2016 it said it saw “substantial growth potential” for the chain. In August, however, the company made a statement saying that GBK had “underperformed” the Board and management’s expectations, and was hampered by an “adverse trading environment” in the UK.
GBK was founded in Battersea, London in 2001 by three New Zealanders with the backing of Kiwi chef Peter Gordon. It was bought by Yellowwoods group in 2010, leading to the rapid growth of the chain.