Tapas Revolution leaves a deficit of £4.3m to unsecured creditors after entering into administration.
The Spanish-inspired casual dining group, which trades from nine locations, was acquired in a pre-pack deal by company MD James Picton for £235,000.
This was the only offer received, and though it was below the willing buyer value, it was above the forced sale value, according to an administrators’ report.
The deal rescues all restaurants under holding company Spanish Restaurant Group and preserves jobs at the company and its subsidiaries.
It is understood co-founder, Spanish celebrity chef Omar Allibhoy is no longer involved in the new business.
The brand was founded by Allibhoy alongside Ken Sanker and Douglas Smilie in 2010.
James Picton, formerly of La Tasca, joined in 2019, while Giles Whitman joined on behalf of investor Mobeus Equity Partners in 2020.
Pre-Covid, the group was “trading well”, becoming the largest Spanish restaurant operator in the UK, with good footfall and high margins.
During Covid, the group secured additional funding from Mobeus, a NatWest-secured Bounceback loan, CBIL and Recovery Loans.
However the Covid crisis exhausted cash reserves, leaving the business weak in terms of cashflow and balance sheet.
More recently it was hit by the cost-of-living crisis, which saw turnover “fall significantly”, while energy costs rose more than 300%
This led to a downturn in performance and the appointment of advisors, and the exploration of new business strategies and alternative revenue streams.
Margins were reviewed and costs improved, with a reduction in head office and director salaries.
However, from November 2020 the situation deteriorated further, and by March 2023, with the company struggling to meet its liabilities, it had no alternative but to appoint administrators.
Simon Renshaw and Avner Radomsky of RG Insolvency were appointed joint administrators on 5 April 2023.
The company and its subsidiaries were subsequently old to Tapas Bidco Limited, linked to James Picton for a consideration of £235,000.
