V8 Gourmet, the operator of the Tiffinbites and Bombay Bicycle brands, has been placed into administration again, just over two weeks after a new backer Calleon Ltd took over the troubled business.
M&C Report understands that Calleon took on V8’s debt from its former backer Indian bank ICICI as part of the deal, but is now understood to be saying that it didn’t realise the size of the investment that would be needed to keep the business afloat.
V8, which operates 17 restaurant and takeaway sites, plus events and airline catering arms, made a pre-tax loss of £2.6m in 2009, against sales of £10.4m. The company was understood to be making a loss of £200,000 a month.
Nimish Patel and Finbarr O’Connell from recovery specialist Re10 have been appointed as joint administrators to V8 and have said that talks are already at an advanced stage with an interested party with regard to the business.
It is understood that Calleon, which is headed by Saeeda Jaffery, may be interested in acquiring part of the business, and had previously indicated it wished to roll out the Bombay Bicycle chain.
Patel of Re10 said: “We are continuing to trade V8 Gourmet and the sites of the sub brands, until such time that we can see a way forward for all elements of the business. At present no changes are to be made, and we are working hard to secure the jobs of all 264 employees.”
The company, which was bought out of administration in 2009 with the help of Indian actress Shilpa Shetty, had been in talks with would-be investors since March after it received a winding up order from HM Revenue & Customs.
Earlier this year, the company had asked property advisors to dispose of 10 outlets, predominantly in London.
Arjun Varma, former managing director, who left the company with his brother, Andy, earlier this month, was thought to be negotiations to acquire the Silk events business and high-end restaurant Vama.
M&C Report comment
Administration, legal wranglings, a Bollywood superstar, a winding up order, a new backer and now another administration. As they say, you couldn’t really make it up but after skirting with disaster for so long V8 Gourmet again finds itself in administration.
Surprising? No. Not when you take into account it made a pre-tax loss of £2.6m in 2009, against sales of £10.4m.
More surprising is that Calleon, its latest would-be saviour, didn’t appreciate the full extent of the problems it was inheriting. It seems that even “substantial depth” to the resources that it reportedly had wasn’t enough to keep the Bombay Bicycle chain operator afloat.
A quick visit to V8’s website will highlight one of the main problems facing any new owners: the sheer diversity of the business. Aside from the restaurant chains and high-end restaurant Vama, there is an events business, airline catering and a ready-meals operation.
But as Re10 the joint administrators point out, discussions are already at an advanced stage with an interested party with regard to the business.
Lets hope that whoever it is goes in with their eyes wide open and their pockets deep.
