Prezzo owner mulls insolvency options for Italian chain amid landlord discussions over rent arrears

08-Feb-2021 - Last updated on 27-Apr-2021 at 13:10 GMT

The owner of Prezzo is exploring whether to put the Italian casual dining chain through an insolvency process amid continued uncertainty about the industry’s reopening timetable.

Sky News reports that private investment firm Cain International, which bought Prezzo from private equity company TPG Capital back in December, is currently in discussions with scores of landlords about future rent arrangements and the payment of arrears.

City sources said on Monday that Cain, which is working with advisers at FTI Consulting, was examining a number of options, depending upon the progress of talks with restaurant-owners.

These options include a pre-pack administration or a Company Voluntary Arrangement (CVA).

A consensual restructuring is also being considered.

Cain, a real estate investor which owns other leisure assets such as Swingers, a chain of crazy golf sites, is expected to decide on a plan for Prezzo in the coming weeks.

Prezzo currently operates 180 sites across the UK and employs around 2,500 people.

The group, which is led by executive chair Karen Jones, previously entered into a CVA back in 2018, eventually closing nearly 100 restaurants in a move that helped it halve its operating losses to £29.7m.

Both Cain and Prezzo declined to comment on the Sky News report.

News of the possible insolvency so soon after Cain acquired Prezzo will lead to further urgent calls from across the hospitality sector for the Government to step in and provide businesses with a more significant and targeted support package.

As things stand, the Government is set to withdraw both business rates and VAT relief from the sector at the end of March, as well as rent protections that will leave businesses facing a multibillion-pound arrears bill.

According to the real estate adviser Altus Group, unless there is some extension to the business rates holiday, restaurants in England and Wales will face rates liabilities of £634.97m, with Robert Hayton, their U.K. President, warning of a 'cliff-edge' in withdrawing reliefs too early.