Prezzo is facing liabilities totalling £70 million as a result of losses sustained by the 47 unprofitable restaurants it closed last month, shedding more than 800 jobs, The Times reports. 

The faux-Italian chain owes £32 million to landlords of the sites that are now closed, while HM Revenue & Customs has unpaid bills just shy of £10 million covering PAYE, national insurance contributions and VAT.

It emerged that, to deal with the liabilities, Prezzo has embarked on a formal restructuring, without which the whole company would have to cease trading and appoint administrators.

In a letter to creditors seen by The Times, Prezzo says the purpose of the restructuring plan is to “restore the group to financial stability”. If it was not implemented, the group would be unable to pay its debts and Prezzo would “likely enter into administration”.

The chain, which at its peak had about 300 restaurants, has suffered not just from the pandemic and inflationary headwinds, but also from having a concept that did not stand out from the crowd. It has been through a number of restructurings, and after last month’s closures it is down to 97 restaurants, although its 90 per cent shareholder, the private equity firm Cain International, is said to be standing behind the business.