• Friday, June 18, 2021
India corona update 
Total Fatalities 383,490
Total Cases 29,762,793
Today's Fatalities 1,587
Today's Cases 62,480
India corona update 
Total Fatalities 383,490
Total Cases 29,762,793
Today's Fatalities 1,587
Today's Cases 62,480

Business

Caffe Nero ‘struggles to satisfy lenders’ and avoid ‘takeover’ by Issa brothers

Zuber (left) and Mohsin Issa.

By: ShilpaSharma

CAFFE NERO is struggling to meet a deadline with its lenders and avoid a takeover by the billionaire Issa brothers, a report said.

Talks with auditor EY ran over the bank holiday weekend as Caffe Nero scrambled to sign-off its accounts for the year to May 2020 before the Monday (31) deadline.

Missing the deadline would leave Caffe Nero in default of its loans, thereby opening the doors for the Issa brothers, who want to gain control of the business, The Telegraph reported.

Last year, Mohsin and Zuber Issa agreed to buy Asda for £6.8 billion.

They also made a bid to seize control of Caffe Nero from founder Gerry Ford last November.

The Issa brothers gained a strong position to take control of Caffe Nero after buying around £140 million of loans from Swiss private equity firm Partners Group via investment bank Morgan Stanley in April.

If Caffe Nero were to default on its loans by swapping its debt for equity, it would open doors for the Issa brothers to acquire the business.

Meanwhile, Partners Group is understood to have raised concerns with Ford about the prospect of a breach of banking covenants – strict rules that govern loans.

Caffe Nero said it does not forecast breaching any of its covenants. However, a spokesman added, “Everything is in hand with the accounts and filing, and the accounts will not be qualified.”

With a slowdown in demand for beverages in city centres, stations and airports, coffee chains have been forced to respond to mitigate losses.

Tesco entered a deal with Pret a Manger last month to begin rolling out concessions in the supermarket.

The Blackburn-based Issa brothers are also exploring plans to reduce the amount of supermarket floor space dedicated towards groceries, and insert ancillary services such as nail bars, dry cleaning outlets and coffee shops.

The Issa brothers have built one of the world’s biggest petrol forecourt empires with private equity firm TDR Capital.

 

Eastern Eye

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