Our deal or bust, Revolution Bars lays it on the line for shareholders
Revolution Bars Group, the troubled AIM listed bar operator, has this morning ended the formal sales process.
In a statement to the stock market, the operator of Revolution, Revolucion de Cuba and Peach Pubs brands said: “The full sales process did not result in any proposals being made relating to the acquisition of the entire issued and to be issued share capital of the Company. The Board confirms that it is not in receipt of any approaches for the Company at the date of this announcement.”
It admitted that several proposals were received for “certain of its subsidiaries and/or business and assets owned” but said none of the proposals would have resulted in a financial return to shareholders.
This week the board has traded barbs with rival operator Nightcap, which proposed a merger that Revolution dismissed as “incapable of being delivered.”
Instead the process has now turns to a restructuring plan to amend and extend lending facilities, exit the leases of loss-making sites, and seek rent reductions on other certain other sites to enable them to return to profitability at a sustainable level, which the board says would be a £3.8 million improvement in EBITDA in FY25).
The restructuring deal will then lead to a £3m of backing from entrepreneur Luke Johnson, £3m from the Robus Recovery Fund II and £3.5 million from three key existing shareholders.
The alternative, it warns, is administration as the company is forecasted to need £0.7m by 24 August 2024 and £8.1 million in the week ending 7 September 2024.
“In those circumstances, it is expected the directors of the Plan Company and certain other Group entities would file for administration to comply with their directors’ duties obligations and to protect the interests of creditors,” the statement says.
A letter will today be sent to all creditors affected by the Restructuring Plan and explains what would likely happen if the Restructuring Plan were not sanctioned by the Court by 15 August 2024.
