Prezzo receives CVA approval

Prezzo has announced it has received the approval of the majority of its creditors for its Company Voluntary Arrangement (CVA).

The CVA became effective following a shareholder meeting held at 11am today. The proposal was supported by 88% of creditors.

The 94 restaurants (out of 302) identified for closure under the CVA are likely to shut their doors in April and May, with staff to be made aware of the exact dates as soon as they have been confirmed. The group stressed that every effort would be made to redeploy team members affected by the closures.

Under the proposal, Prezzo’s restaurant estate will include rent reductions ranging from between 25% to 50% across 57 sites. The CVA has a duration of two years.

Prezzo said it was making progress on its Transformation Plan, which it said was focused on “reshaping the business around a smaller, profitable core of restaurants with strong growth prospects backed with investment to differentiate and strengthen the brand and build great restaurant teams”.

Chief executive Jon Hendry-Pickup said: “I would like to thank our creditors and landlords for supporting our Transformation Plan. While we continue to be profitable, the pressures on our industry have been well documented. Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders. It has been a challenging time during the CVA process and I would like to thank our suppliers, colleagues and customers for their patience and support.”

MCA revealed details from the CVA document earlier this month, including that revenue dipped 3.3 % year-on-year for the twelve months to December 2017, whilst like-for like sales declined by 8.1% year-on-year. Meanwhile Hendry-Pickup also gave us his views.