Shareholders were advised on 24 October 2018 that in light of GBK’s continued underperformance in the current macroeconomic environment in the UK and deteriorating financial position, the board of GBK had initiated a CVA process aimed at restructuring the business’s leased property portfolio in line with current market valuations.
On 9 November 2018, shareholders were further advised that a creditor’s meeting was held to consider the CVA proposals. At the meeting, the CVA proposals were approved by the requisite majorities of the unsecured creditors of GBK. In terms of the relevant legislation in the United Kingdom, unsecured creditors have a 28-day period from the date of lodging the result with the authorities, in which to apply to court to challenge the CVA proposals. The result was lodged with the authorities on Monday 12 November 2018.
The board can confirm that no objections were raised during the 28-day challenge period, which concluded on 10 December 2018, thus completing the process.
In terms of the CVA, fourteen of the seventeen severely under- performing restaurants identified as part of the remedial process have ceased trading. While the other three sites have improved their performance, they remain under review, pending further action.
The board is satisfied that the CVA programme will achieve its goal of promoting the long-term financial viability and sustainability of the GBK business.
Successful restructure of debt finance
The board advised shareholders that in line with the goal to restructure the Group’s debt profile to better align with the business’s requirements, the existing debt has been successfully refinanced with effect from 10 December 2018. The restructuring will ensure appropriate levels of debt and optimal capital allocation aimed at facilitating growth of the business and improving returns to shareholders.
Detailed information regarding this new structure will be published in the Group’s Audited Annual Financial Statements for the year ending 28 February 2019 which are expected to be published on or about 29 May 2019.