Prezzo warns creditors it would ‘likely enter administration’ without restructuring plan

By James McAllister

- Last updated on GMT

Photo credit: prezzorestaurants.co.uk
Photo credit: prezzorestaurants.co.uk

Related tags Prezzo Cain International Casual dining Multi-site R200 Italian cuisine Restructuring Administration

Prezzo has warned creditors that it would ‘likely enter into administration’ should its recently announced restructuring plan, which will see nearly a third of its estate closed, not be implemented.

In a letter to creditors seen by The Times​, the Italian casual dining chain, which is backed by Cain International, said the purpose of the restructuring plan is to ‘restore the group to financial stability’.

The group is facing liabilities totalling £70m as a result of losses sustained by the 46 loss-making restaurants it announced the closure of last month​.

About 810 jobs are at risk of redundancy as part of the overhaul, which will leave the group with 97 sites remaining.

According to The Times​, Prezzo owes £32m to landlords of the sites that are now closed, while HM Revenue & Customs has unpaid bills just shy of £10m covering PAYE, national insurance contributions and VAT.

Last week it emerged that, to deal with the liabilities, Prezzo had embarked on a formal restructuring, which can only be used where the alternative outcome is insolvency.

No reference to the plan was made when the group originally announced the closures.

An insider told Sky News ​last week​ that the group’s landlords, which include some of Britain’s biggest commercial property-owners, will be able to vote on the plan at a hearing on 22 May.

However, they added that it is certain to be approved because of Cain’s status as Prezzo’s largest creditor.

The group’s remaining sites will reportedly not be the subject of any rent cuts.

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