The Company Voluntary Arrangement (CVA) proposal document for Byron shows that company’s like-for-likes sales declined 17% in the final two weeks of its 2017 financial year, and tracked at an average of -5.9% during the entire 12-month period.

As at 10 December 2017, the business had seen a further decline in like-for-like sales in its current financial year, in which year-to-date like-for-like sales are averaging -4.4%.

Revenue for the group’s 2017 financial year stood at £88m, up from £80.4m the previous year, however it posted a loss of £10.3m against a profit of £91k the year before.

The document seen by MCA shows that the offer by Three Hills Capital Partners (THCP), an existing shareholder in Byron, to become the new majority shareholder in the business is conditional on the CVA receiving approval and on the group’s secured lenders (understood to include Santander) agreeing to write-off c£21m due from the company out of a total of £46m.

KPMG were engaged to undertake a marketing process of the business last July in order to secure new investment.

A total of 18 financial investors and nine trade buyers were approached. KPMG received inbound approaches from a further two financial investors and one trade buyer. The process resulted in six offers being made for the business.

Five of the six offered received were conditional on the approval of the CVA, with THCP’s offer was considered the best. Its offer will see it lend c£34.5m directly to the business by way of subscribing for new unsecured loan notes issued by the company.

Of these amounts: £25m will be paid to the secured lenders as a full and final settlement of their existing secured claims of c£46m; the balance c£9.5m less certain legal fees) will be immediately advanced to the company to be used for general corporate purposes.

The company’s liability to the shareholder of c£9m will converted into equity.

The document also shows that last June, the company identified a potential future breach of its banking covenants. The banks granted a covenant waiver in return for the injection by the group’s then majority shareholder Hutton Collins of a further £3.3m in addition to an amount of £1.7m, which had already been made available.

It said that the business had been adversely impacts by rising costs of labour, product and business rates in addition to the decline in sales.

Earlier this week, Byron confirmed that it was to enter a CVA, which could lead to the sale of the currently 67-strong business but the closure of 20 of its sites.

The company confirmed that THCP, which invested in the business when it was acquired for £100m by Hutton Collins in October 2013, had agreed to become its new majority shareholder subject to the successful completion of the reorganisation process.

Hutton Collins will sell half of its current holding in Byron to THCP and will retain a significant minority interest in the business.

Byron operates from 67 leasehold restaurants across the UK and holds a further nine non-operational leasehold sites including its head office in London.

The 20 sites under threat of closure include sites in Birmingham, Bristol, Cardiff, Manchester Deansgate and London’s Spitalfields. It also includes two sites that are yet to open, in Stratford-upon-Avon.

A further five sites identified as being viable at a reduced rent, equivalent to two thirds. These sites are in Bromley, Exeter, Kingston, Leeds and Milton Keynes.

It also includes four sites that Byron had already agreed to lease in Plymouth, Eastbourne, Watford and Reading.