Revolution Bars has been given the go ahead to implement a restructuring plan that will see it close more than a quarter of its bars, reduce its rental obligations and extend and amend its lending facilities, in a move designed to save the business from collapse following a drop in late-night trade after the pandemic.
Revolution Bars Limited, part of a group owning the Revolucion de Cuba and Peach Pubs brands, is “heavily loss-making” and “deeply unprofitable”, the court was told.
Lawyers for the business said it was reliant on funding from the group “in order to survive” but it was predicted to “run out of cash” in August.
At a hearing in London on Thursday, Mr Justice Richards approved the plan, concluding it was “not unfair” to creditors, landlords and shareholders.
The restructuring scheme will amend Revolution Bars Limited’s obligations under a fully drawn £30 million “revolving credit facility” with NatWest bank and extend the time to pay its tax debt, its legal team told the judge.
It will also feature the “right-sizing” of a portfolio of leases “in order to create a sustainable business”.
Tom Smith KC, representing Revolution Bars Limited, told the hearing that the firm and its parent company had “run into financial difficulties” and faced being unable to pay debts without the restructuring plan between it and creditors.
Revolution Bars Limited was “balance sheet insolvent” with assets of £49.6 million but total liabilities of £118.7 million, the court heard.
Mr Smith said: “With an unprofitable business and no cash, unless the restructuring is successful, the group companies will, save for the Peach Group, collapse into insolvency processes.”
Revolution wants to retain 14 of its “most profitable sites”, while 18 sites are considered to be “economically unviable”, Mr Smith said.
The restructuring plan received “overwhelming” support from creditors who cast votes at meetings in July, the lawyer said.
Rob Pitcher, chief executive of Revolution, said: “The group is now well-diversified across the key brands, providing a more secure financial base and we look forward to the future with improved optimism.
“We know this has been a very difficult period for all of our teams both in our sites and in our support office and I’d like to thank them for their support and resilience.
“I would also like to thank the group’s wider stakeholders for their support, including our secured lender, current shareholders, our new and existing shareholders who have participated in the fundraising, and all our advisors, who have assisted us in the development of the plan.
