The restaurant chain behind Cafe Rouge and Bella Italia plans to sell its Strada brand as part of a major restructuring by its new owners.
Tragus Group, which was bought by a consortium led by private equity firm Apollo Capital Management from rival Blackstone earlier this year, is understood to have put the 56-store Italian restaurant chain Strada on the block with a £40 million asking price.
The group, which currently runs around 290 outlets and employs 7,000 staff, also plans a debt-for-equity swap to cut its borrowings to £91 million from £354 million.
Finally, the restaurant group wants to negotiate a company voluntary agreement in a bid to ease its lease terms with landlords and allow it to focus on its Cafe Rouge and Bella Italia restaurants.
As part of the agreement the group plans to switch the rents on 150 outlets to monthly from quarterly. Another 19 restaurants will see their rent reduced to 60 per cent of current levels for two years and paid monthly. Lastly, another 32 outlets will see their rent reduced to 50 per cent of current levels for three months.
Tragus said compromise payments will be made to all landlords asked to cut rents.
Apollo Capital Management added it will commit £20 million of new money to Tragus once a company voluntary agreement is reached with landlords. In total it plans to invest £110 million over five years in Tragus's two key brands, Cafe Rouge and Bella Italia.
Tragus chief executive Steve Richards said the plan was "crucial for reducing the group's level of debt."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article