Investec and SC Lowy acquire Gaucho's debt

An article in the Times reported that the deal would see Investec and SC Lowy, which were existing lenders to Gaucho, buying out the remaining debt owed to a consortium including HSBC at around 40% of its original value of £50m.

The publication also reports that the lenders are part of a consortium that has agreed to acquire the business out of administration. Unquote understands that Aurelius, which was reportedly also interested, is no longer involved in the process.

Investec was yet to respond to a request for comment at the time of publication.

Equistone wrote off its investment in Gaucho in July when the company's lenders appointed Deloitte as administrator. The development came two and a half years after the GP reacquired the company with capital drawn from its €2bn fifth fund in a deal believed to have been worth around £100m.

According to publicly available documents, Gaucho's holding company reported adjusted EBITDA of £8m in 2016 – the most recent period for which results are available – from a turnover of £83.1m. However, it also reported a loss after tax of £13.4m in the same year.

At the time of the appointment of administrators, Unquote understood that Equistone had presented Gaucho's lenders with solvency proposals for the group on a number of occasions, which would have seen the GP continue to fund the company.

The proposals included a company voluntary agreement (CVA) for the group's Cau chain and the acquisition of existing lenders' debt positions. However, a report by Sky News indicated that neither the Equistone proposal – nor three alternatives put forward by Osmond Capital, Core Capital and Limerston Capital – came close to matching the £50m owed by Gaucho to its lenders.

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• Topics
• UK / Ireland
• Turnaround/Special Situations
• Consumer
• United Kingdom
• Investec
• Equistone Partners Europe
• Deloitte