Tragus Group, one of the UK’s largest casual dining operators, has announced a reorganisation of its business to secure an optimal capital and operational structure, provide the necessary capital to revitalise its core brands, Bella Italia and Café Rouge, and ensure a long-term sustainable future for the business.
Key Highlights
- The Group’s owners have agreed a financial restructuring to strengthen the balance sheet and reduce the debt burden from £354m to £91m
- Initiated Company Voluntary Arrangements (“CVA”), to revise lease terms, refocus the business on a smaller, more profitable core estate principally comprising of Bella Italia and Café Rouge restaurants.
- Commenced the sales process for 56 Strada restaurants
- £20m of new money committed by new owners to secure a long-term future for Tragus, conditional on the approval of the CVA
- All Strada restaurants and those under CVA proposals will continue operating as normal in the near-term.
Future plans
- Subject to successful completion of the restructuring process, the Group plans to open 12 Bella Italia sites in the next 12 months, with more than 50 openings expected over the next five years
- £110m of investment in Bella Italia and Café Rouge brands expected over the next five years.
Plan is crucial to securing strong, sustainable future for Tragus
Tragus Group CEO, Steve Richards, commented:
“The core of our business is strong; we have a loyal customer base and valued brands but some of these brands, such as Bella Italia and Café Rouge, require innovation and substantial investment to secure their futures. Similarly, Strada is a popular restaurant brand beloved by customers, but it needs separate attention and investment to realise its full potential.
“The plan we have announced today is crucial for reducing the Group’s unsustainable level of debt, providing the right operational structure for the business and securing a strong and sustainable future for Tragus and all of our brands. We hope that creditors will accept our proposals which will provide us with the necessary financial strength to be able to access new market opportunities and resume growth and development in our core estate to the benefit of all of our stakeholders.”
Detailed CVA proposal documents have been made available to Tragus creditors, with a vote on the proposals on 20 June 2014. 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 of Zolfo cooper commented:
“We are very pleased to be working with Tragus on this major project to create a more efficient business, which will preserve jobs while repositioning the business for growth. We are optimistic that creditors will accept the proposals set out, which have been designed to provide the best outcome for all stakeholders.”
Paul Hemming, a Corporate Finance Partner in Zolfo Cooper’s Advisory Services practice and head of the firm’s leisure industry team will lead the process to identify appropriate equity sponsors for the group’s Strada business comprising 56 sites nationwide.
“We are confident that the well-known and popular Strada business will be attractive to a broad range of potential equity sponsors who are able to appreciate the quality of the brand and its management team.”
About Tragus
Tragus is one of the largest casual dining restaurant chain operators in the UK, with over 290 sites across the country. Tragus operates primarily under the Café Rouge, Bella Italia and Strada formats in the UK.
Café Rouge
Café Rouge sites are designed to provide the look and feel of a classic Parisian bistro, with a menu which includes such bistro classics as steak frites, and tarte tatin. Café Rouge is predominantly a high street brand but also operates successfully in shopping centres, airports & transport hubs.
Strada
Strada is a group of contemporary Italian restaurants located on the high street serving good quality, simple, freshly prepared dishes using the finest seasonal produce. The menu offers hand stretched pizzas, pastas, risotto and grilled meat and fish dishes.
Bella Italia
Bella Italia is an all-day Italian trattoria with a rustic ambience. Its restaurants are in prime locations predominantly on the high street but it also operates from leisure park sites. In addition to classic pizzas and pasta its broad menu also includes a range of grill main courses, sandwiches and salads.
Belgo
Belgo is Britain’s favourite Belgian restaurant, famous for Moules, beer and a great night out.
Concessions
The portfolio also includes 20 concessions at Heathrow, Gatwick and in Center Parcs. Tragus also operates Brasseries under the brands Huxleys, Belgo, Amalfi, Potters and Ortega.