Troubled burger chain Byron yesterday agreed a deal with creditors to restructure its business – paving the way for it to close as many as 20 sites in the UK.
Around a third of its 67-strong estate could be in the firing line after the chain’s creditors voted in favour of its company voluntary arrangement.
Reports suggest the restructuring plan also involves reducing rent by a third at five sites.
KPMG, which oversaw the CVA proposals, said that 99% of creditors supported the rescue strategy. It required 75% approval for the plans to go through.
Simon Cope, chief executive of Byron, said it would do everything in its power to place staff from the affected sites elsewhere in the business. Byron employs 1,800 people in the UK.
“With the support of our new owners, Three Hills Capital, I’m confident that a new Byron can begin to take shape,” he stated. “Byron’s brand and offer remains strong and distinctive, and with a smaller and more efficient restaurant estate we can continue to provide an outstanding burger experience for our customers and to develop and grow a sustainable and innovative business for the long term.”
Will Wright, restructuring partner at KPMG and joint supervisor of the Byron CVA, said: “Today’s creditor vote in favour of the CVA proposal will allow Byron to conclude its previously negotiated financial restructuring and is a key step in the directors’ turnaround plan.
“As with all CVAs, more than 75% of creditors had to vote in favour in order to pass the resolution. Today’s vote saw us secure significantly more than this majority with 99% of all voting creditors choosing to approve the CVA.”
Byron had been one of the fastest growing chains in the market, but in recent times certain parts of its portfolio did not meet expectations. With gathering economic headwinds starting to impact the sector more profoundly, directors decided they had to act sooner rather than later to safeguard its future.
Under the terms of the deal agreed yesterday, existing investor Three Hills Capital Partners will now become the majority shareholder.
The current owner, Hutton Collins, will retain a minority stake in the business.
Founded by Tom Byng in 2007, Byron has served more than 24 million hamburgers during its decade in business. The company was acquired by Hutton Collins in 2013.