Barracuda Pub Company has completed a restructure, which will see the separation of its operating company (opco) from its property company (propco), with ex-Mitchells & Butlers (M&B) chief executive Adam Fowle becoming chairman of the newly formed company.
Under the terms of the restructure, the opco will be renamed The Bramwell Pub Company and will benefit from a credit facility of up to £10m from new backer Värde Partners.
The company said it believed that the restructuring and new credit facility created a “solid foundation to execute the sales and investment plans” developed by the new management team led by Roger Moxham.
As part of the restructure, the company will operate 190 pubs with 18 sites to be returned to landlords (seven of which are currently trading).
The move also sees a change of chairmanship with Fowle becoming chairman of the new group, succeeding John Conlan, who steps down after overseeing the financial reorganisation.
The announcement follows an operational reorganisation undertaken earlier this month, which simplified the structure under the new management team led by new chief executive Moxham.
The group said that the financial restructuring placed it onto a “firm financial footing” allowing a planned investment in service, training and refurbishment in line with the new business plan.
It is understood that there will be no impact on the day-to-day operations of the company, and business will trade as usual.
All suppliers and contractors are unaffected and the company will continue to do business with them as previously. The restructured management team under Moxham will remain in place.
Moxham said: “The blend of debt and equity gives the company an optimal capital structure to support the execution of our business plan. Throughout the restructuring our goal has been to minimise disruption to our staff, customers, partners and suppliers and this has been achieved. We are grateful for their support during this period.
“Looking forward we will be able to invest in our assets enhancing the customer experience and developing the company. The company has continued to perform in line with our expectations and today’s announcement attests to the ongoing confidence of all our investors. We are very excited about the future and confident that the company is in good shape to make significant, sustained progress in line with our business plan.”
Comment by M&C Report editor Mark Wingett
It’s a role call that includes Novus, Orchid, Paramount, Regent Inns (now Intertain), Bay Restaurants and Town & City; now Barracuda becomes the latest member of the restructuring class of 2009 to highlight that the swathe of debt for equity swaps that took place in and around that year did not go deep enough or expect the downturn to go on this long.
With the exception of Novus, the pin-up business for how a restructuring and subsequent bank support-led process can work, and the now merged with Stonegate, Town & City, the remainder continue to face speculation about their futures while in the cases of Bay and Paramount no longer exist.
Barracuda was faced with a debt of £163m through its 2009 restructuring that was spread between its opco and propco. That debt burden, after a significant period of conjecture, has been written off by its many backers, leaving Varde to take on the process of reviving a group that has stood still for the last few years. A long process, this is one where the group’s backers have again taken a significant haircut in terms of debt, but one that leaves a company, although still with a long tail - many believe is nearly half its estate - with a brand, Smith & Jones, that has traction and prominent locations on the high street.
Former chief executive Mark McQuater, who stepped down earlier this year, said that Smith & Jones was a special place that “white-collar workers would go to eat and have fun”. Under the new management of former M&B exec Roger Moxham and a successful restructure it now seemingly has a platform to attempt to make good on that statement.