Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said: ‘Like many other businesses in the casual dining sector, in recent times the company has been adversely impacted by a combination of well-documented pressures including a gradual decline in consumer spending and increasing competition, coupled with the rising costs of labour, raw materials, rent and business rates.’

The CVA follows a strategic review of the business undertaken by the company’s directors.  Carluccio’s operates 103 restaurants across the UK. The CVA proposal divides the company’s sites into two categories: for a total of 69 category 1 sites, the sites will be retained at current rents. For the remaining 34 category 2 sites, a reduced rent, equivalent to 67%, will be paid for six months, while the company engages with landlords to agree the basis of any continued trading from these premises.

Wright said: ‘Specifically, this CVA is designed to tackle the cost of the company’s leasehold obligations across its restaurant portfolio, which if successful, will allow the business to move forward across a core, more profitable estate. Crucially, it forms one element of a wider turnaround plan which, pursuant to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder, to fund an extensive and far-reaching investment and growth plan.’

The proposed supervisors of the CVA are Will Wright and Rob Croxen from KPMG’s restructuring practice.

Carluccio’s needs to secure at least 75% creditor approval for the CVA for it to proceed. A detailed proposal document is available to creditors via a dedicated website, and creditors will vote on the CVA on 31 May 2018. KPMG says it will spend the coming weeks in talks with creditors to ensure they understand the full detail of the proposal.

Report by Pat Sweet