Leon launches CVA proposal
As reported by Sky News, the group circulated details of a Company Voluntary Arrangement (CVA) to landlords and lenders earlier today (1 December).
The CVA will be in place for two years and see four of Leon's restaurants move to a rent-free model.
However, the majority of its 60 outlets will switch to turnover-based rents.
As part of the restructuring, Leon’s shareholders would inject £3m into the company if its cash reserves fall below £2.25m for more than 28 consecutive days.
The CVA, which requires creditor approval, is not expected to trigger any store closures or job losses among Leon’s 650-strong workforce.
Leon CEO John Vincent, who co-founded the business with Government 'food tsar' Henry Dimbleby in 2004, said: “In common with the whole hospitality sector, the past nine months have been the most difficult in Leon’s 16-year history.
“We started the year as a profitable and growing business but the effects of the repeated lockdowns and tier restrictions have made our current business model untenable.
“We have also engaged extensively with the vast majority of our landlords across the last few months.”
He added that the company had a duty to secure Leon’s future for the benefit of all its stakeholders and, after careful reflection, believe this CVA is the best way of doing that.
“It will give the business the breathing space it needs before it can fully resume normal trading and look to grow again,” he said.
As well as its UK estate, Leon operates global locations in Washington DC, Oslo, Amsterdam, Dublin, Rotterdam and Gran Canaria.
