KKR, Pemberton agree to £150m refinancing deal for CDG

Nicole Tovstiga
02 July 2018

Tweet
Facebook
LinkedIn
Google plus
Send to

Lenders KKR and Pemberton Asset Management have agreed to a ТЃ150m debt-for-equity swap refinancing deal for UK-based restaurant chain owner Casual Dining Group (CDG).

The capital injection and refinancing were led by KKR with the support of management and shareholders, including funds managed by Apollo Global Management and Pemberton Asset Management.

The deal will allocate restaurant chain company shares to the lenders, and also includes a £30m new cash injection from existing shareholders and lenders. Following the transaction, CDG will see its debt slashed by 50% to lower than three times the company's core earnings.

KKR has been involved as a debt investor since December 2015 when it facilitated a loan through its European direct lending platform. Since then, some of their debt has been converted to equity, according to a source with knowledge of the situation.

The UK casual dining industry, the former darling of private equity houses, has recently come across challenging times due to oversupply, as well as macroeconomic and political headwinds.

However, CDG claims to have seen an upswing across the past 14 weeks with total sales up around 5% and like-for-like sales up 2.3%. It has also opened seven new concession sites in airports and hotels since the start of 2018. With fresh capital strengthening its balance sheet, CGD said it plans on investing in its brands.

Previous funding
Apollo Global Management led a consortium of investors to take control of the restaurant chain operator, then named Tragus Holding, from Blackstone in a restructuring deal in March 2014. The consortium also included Oak Hill Capital Partners and York Capital Management. The deal saw Tragus's debt burden cut from £354m to £91m through a debt-for-equity swap.

The new owners also committed £20m in fresh capital to the business and expected to see up to £110m in new investments for Tragus's Café Rouge and Bella Italia brands over the ensuing five years.

Company
Founded in 2002 and based in London, CDG operates restaurant chains across the UK. Its main brands are Café Rouge, Belgo, Strada and Bella Italia. Following the 2014 deal, the group was renamed from Tragus Holding to Casual Dining Group.

People
Casual Dining Group – Steve Richards (CEO).