Casual Dining Group has reportedly decided against a £160m refinancing plan after investors in the restaurant sector pulled back from raising the cash.
The restaurant group, which owns Cafe Rouge, Las Iguanas and La Tasca, had been trying trying to replace a debt package held with hedge funds but was unable to gain support from investors at a suitable rate, according to The Times, which was citing City sources.
Failure to gain support came in spite of a 3.3% rise in like-for-like sales since Christmas and a profit of £16m last year. Last year, the firm’s site openings and growth produced nearly £300m in revenue (up 30% on 2015) but saw a pre-tax loss of £50m.
Speaking to City A.M., Steve Richards, CEO of Casual Dining Group, said: “Growing and highly cash generative companies such as CDG will constantly look at financing options and we did indeed look at the European high yield bond market earlier in the year and whilst there was substantial interest, the pricing was not attractive enough to justify the expense of launching a formal process at that time.
“CDG continues to trade strongly, performing ahead of the market with near double digit revenue growth and like-for-like sales up three per cent in the five months since Christmas and with an improvement in the past two months. We continue to develop the business by investing in our core brands in the UK and expanding our franchise business in South Africa and the Middle East.”