Talks are continuing over the future of premium steak chain Gaucho, with speculation that a debt-for-equity swap has now become one of the options being explored.
MCA has learnt that a preferred bidder is still yet to be chosen for Gaucho, which was placed into administration last month.
MCA has learnt that Newcastle-based hospitality operator The Cairn Group is one of the parties that is still in the running for the 16-strong business, alongside Luke Johnson, who is thought would look to back the existing management team; the Carlyle Group; Endless; and Aurelius Equity. The latter is thought to be working with Martin Williams at M Restaurants on its bid.
However, speculation overnight suggested that Gaucho’s five-strong banking group had sold some, if not all, of its debt in the business to two specialist banks, which could lead to a debt for equity swap that would see more money injected into Gaucho and the existing management team led by Oliver Meakin backed to take the company forward.
Previous backer Equistone had a £20m bid for Gaucho rejected by the banks before the business was placed into administration with Deloitte. It is thought that recent bids for the business have been at the £25m mark or higher.
It is understood that any successful bidder would have to carry out a Company Voluntary Arrangement (CVA) of the business, in order to keep the estate in one piece, and immediately pay an outstanding tax bill of more than £1m. Both situations are thought to be complicating the bidding process.
Richard Caring and D&D London are believed to be amongst the parties that have shown an interest in acquiring parts of the Gaucho estate, with sites in Swallow Street, the O2 and Richmond seen as the “jewels in the group’s estate”.
Last week, Gaucho chief executive Meakin released a statement saying he was confident the business would be sold “within the next two to three weeks”.
Meakin said the restaurants were “profitable and completely sustainable” adding that further expansion was likely following the sale.
Last month, Deloitte was confirmed as administrators for Gaucho Grill Limited, Gioma (UK) Limited and CAU Restaurants Limited, with all 22 CAU restaurants closing immediate effect resulting in approximately 540 redundancies.
It said that all of the Gaucho sites would continue to trade ‘as usual’ while the administrators seek to find a buyer for the business. They will also look to find potential buyers for the CAU sites.
GVA has been appointed to market the CAU leasehold portfolio, with offers for part or all of the estate due last week.
