Revolution Bars eyes closures as part of restructuring to avoid going bust
25 September 2020, 13:34
The chain, which operates 74 bars, has said it is a considering a company voluntary arrangement to reduce debts.
Revolution Bars has said it could shut sites as part of a radical restructuring to stave off collapse amid fears it will take a heavy hit from fresh coronavirus restrictions.
The company told shareholders on Friday it is assessing restructuring options after challenging conditions were “exacerbated” by the latest measures introduced by the Government to fight the pandemic.
Bar operators are expected to be particularly impacted by the 10pm curfew on hospitality venues unveiled by the Prime Minister on Monday.
Revolution, which also operates the Revolucion de Cuba brand, said it is evaluating the potential impact of the restrictions “before deciding what the next steps should be”.
The chain, which operates 74 bars, said one option being considered is an insolvency tool called a company voluntary arrangement (CVA) to reduce debts.
High street chains such as Pizza Express have used CVAs during the pandemic to secure restructuring deals with major site closures.
Revolution furloughed 2,775 people at the height of lockdown after it was forced to shut all its bars.
The company has reopened 62 of its bar sites across the UK.
In a statement to the London Stock Exchange, the company said: “Further to the continuing challenging trading environment and exacerbated by the further Covid-19 related restrictions announced by the Government earlier this week, the board of Revolution confirms that it has been working with advisers to assess various strategic options for the group.
“Revolution has a strong balance sheet following the £15 million equity fundraising and the extension of its banking facilities announced in June but the board believes that the long-term nature and potential impact of the latest operating restrictions means that it must consider all necessary options to ensure that its business remains viable.”
It is understood that the company is working with insolvency specialists at AlixPartners on the process.
Shares in Revolution were 18.2% to 9p in early trading.
