- Saturday, April 27, 2024
By: Shilpa Sharma
CAFFE NERO has saved itself from the latest threat posed by the Issa brothers by meeting the deadline to file its annual accounts and pledging to meet all of its banking covenants, a report said.
A rally in its sales after the government lifted hospitality restrictions supported the business.
The chain’s weekly sales over the past 13 weeks had risen 82 per cent, and current trading is between 70 per cent and 80 per cent of pre-pandemic levels, The Times said.
Billionaire brothers Zuber and Mohsin Issa have sought to acquire Caffe Nero to expand the chain into the EG Group, their petrol forecourts business, and potentially into Asda.
They completed a deal to buy the majority of Caffe Nero’s debts of about £140 million in April, which strengthened their position to take equity in the company if it defaulted on its loans.
However, Caffe Nero said it has repaid all bank loans and is expected to meet all of its banking covenants for the next 12 months, the newspaper said.
Caffe Nero’s annual accounts to the end of May 2020 showed a 22 per cent decline in revenue to £239.7m. It even reported a pre-tax loss of £6m.
Caffe Nero was founded by Gerry Ford in 1997. Nero Group, which also owns Harris + Hoole, employs 6,000 people at about 800 sites in the UK.
Last year, the group entered a company voluntary arrangement (CVA) with creditors, a restructuring which gave its 650-plus landlords 30p for every pound they were owed.
Meanwhile, the Issa brothers are funding a legal challenge to the CVA, which is being pursued by one landlord after eight others agreed settlements.
Caffe Nero tried to have the case dismissed, arguing that the challenge was “being continued solely” for EG Group’s purposes and that the landlord “has no legitimate interest in the relief sought”.
On Friday (28), a judge ruled that the legal challenge will go ahead in July.
