Caffe Nero’s rescue deal faces a legal challenge from landlords after bosses rejected a late takeover approach from the billionaire Issa brothers.
The struggling chain last night said its company voluntary arrangement (CVA), an insolvency that will help it survive the pandemic by providing relief from debts and rental payments, was passed with 90 per cent support from creditors including ‘an overwhelming majority of landlords’.
But the move angered some landlords because it came just hours after Mohsin and Zuber Issa bid to buy the business, which has 800 outlets and 5,000 staff.
Cafe Nero pressed ahead with voting on a company voluntary arrangement on Monday, a type of insolvency that will help it survive by providing relief from debts and rental payments
The brothers, who founded petrol stations giant EG Group and bought Asda last month for £7billion, also offered to repay Nero’s landlords in full for rent that has gone unpaid.
Their advance was rejected by Nero’s bosses, however, who claimed a deal could not realistically be done quickly enough and that the move was designed to disrupt the CVA process.
The Issa brothers’ lawyers yesterday, according to Sky News, warned that the chain would likely face a rebellion against the CVA by landlords, and insisted a deal could be put together in two weeks.
The intervention is likely to complicate matters for Nero’s bosses, including founder Gerry Ford.
Creditors, including landlords, can challenge the CVA for 28 days after it is passed. One accused Nero’s bosses of behaving questionably.
‘Where is the independent oversight of wider creditor and stakeholder interests?’ one landlord told Sky News.
Caffe Nero said: ‘After the devastating effect caused by the pandemic, the approval of this CVA safeguards the immediate future of the business, and provides a sustainable platform from which the company can navigate challenges ahead.’
EG Group declined to comment.
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