Gordon Ramsay has admitted that his restaurant group came close to collapse earlier this year after breaching covenants on its £500,000 overdraft and £10m of loans with RBS.
Ramsay said that auditors KPMG, sent in by the banks to examine why Gordon Ramsay Holdings (GRH) was losing millions of pounds, drew up plans to put the company into administration.
The accountants found that GRH’s overseas restaurants were losing so much money that they were threatening the core UK operations and that the company also owed HM Revenue & Customs £7.2m in taxes.
KPMG planned to take control of GRH's 21-strong global restaurant and pub chain to cherry-pick the winners and sell off the other sites.
Ramsay said that he managed to stave off administration by closing the Maze restaurant in Prague and handing back the ownership of the sites in Los Angeles and Paris to the hotels that housed them.
He also invested £5m of his own money in the business, reduced the number of covers in his other restaurants and got rid of a quarter of the staff at the London head office.
Ramsay said: "We were told to go into administration. I thought of selling some of the company. My wife and I discussed selling our house. It's taken several million pounds of my own money with several more millions to come but I'm still standing."
The chef said that he had now paid off £6m of the outstanding £7.2m taxes owed and hadn’t breached any covenants since February.
He admitted that the company had expanded too rapidly, with the opening of 10 restaurants in the last 10 months, many of them overseas.
Ramsay said that he expected KPMG to give the company a clean bill of health and predicted that the group would generate profits of £7m to £8m next year, with GRH’s 2008 accounts to be published by June this year.
The company is continuing to expand, albeit more cautiously, with restaurants set to open in Melbourne, Qatar, Tuscany and Sardinia.
