TPG's Prezzo to close 94 restaurants following CVA

The proposal is subject to approval from 75% of Prezzo's creditors, with £154m owed to secured creditors including Barclays Bank and Royal Bank of Scotland and a further £66m owed to unsecured creditors.

The development is the latest sign of a challenging environment for the casual dining sector. The segment has seen significant investment from private equity houses in recent years but is struggling due to oversupply, as well as macroeconomic and political headwinds.

TPG acquired Prezzo in a £304m take-private in November 2014. Since then, the business has increased its number of sites from 249 to more than 300. The business said in the CVA that it would exit "those restaurants that cannot be made viable even with a rent reduction".

The company's revenues dropped 3.3% year-on-year in 2017, with like-for-like sales dropping 8.1%. It initiated a cost-saving exercise in 2017, which Prezzo said has delivered a £10m annualised saving.

As part of the process, the group – which comprises brands including Prezzo, Chimichanga, Caffé Uno, Cleaver and MexiCo – will also look to rearrange its rental, service and insurance payments from a quarterly to a monthly basis, to assist with cashflow.

However, the CVA also revealed that Prezzo will look to refurbish its best performing sites in order to improve efficiency and drive footfall.

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