Giraffe, the Boparan Holdings-backed group, acquired Ed’s Easy Diner, which at one point was valued at c£90m, for just £8.75m, according to a new report by administrators KPMG.
The report states that the management of Ed’s Easy Diner met with 22 parties regarding securing new funding for the business, with six indicative offers subsequently received, including three for the then 59-strong group and three for the acquisition of the bank debt.
One offer was for an injection of £2m along with a proposal that the group’s bank, RBS, write off c£10m of debt, another suggested that c£13m of debt be written off by the bank.
There was also a pre-pack offer for a portion of the diner portfolio for £5m, including a roll of existing bank debt of £5m into the new structure.
Luke Johnson and RCapital were believed to have made offers for the business.
The report states: “The Giraffe offer secured the highest return for creditors and the majority of the other offers received would not have been executable in the short time frame available.”
The report filed at Companies House also suggests creditors will be left c£27.9m out of pocket in the wake of the company’s administration last month. It stated that Ed’s Easy Diner needed an injection of £2m to £3m in working capital to continue trading. The company had lost £6m between October 2015 and August 2016.
RBS had provided a £20.6m loan to Ed’s Easy Diner. There was also an overdraft facility of £1.5m and unsecured loan notes totalling £16m.
Last month, Giraffe acquired the brand, the head office team and 33 Ed’s Easy Diner restaurants through a pre-pack administration.
The 26 remaining sites were closed.
