Lenders to the restaurant chain founded by the former Masterchef winner Thomasina Miers are to write off millions of pounds of debt in a financial restructuring that will also involve the closure of a third of its outlets.
Sky News has learnt that a company voluntary arrangement (CVA) being proposed by Wahaca will lead to its shareholders and lenders injecting £5m of new money into the business to put it on a more sustainable footing.
Lenders led by the taxpayer-backed NatWest Group will also see roughly 60% of their exposure, or £13m, written off, while shareholders are writing off the entirety of the £12m they are owed by the company.
Image: Masterchef winner Thomasina Miers, founder of the Wahaca restaurant chain
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Last month, Wahaca said it would permanently shut 10 of its roughly 30 sites in an attempt to return to profitability.
The latest details were sent to Wahaca’s creditors earlier this week ahead of a vote on the CVA which is being supervised by PricewaterhouseCoopers.
Sources said the proposals underlined the fact that creditors other than landlords were also being asked to share the financial pain of the chain’s restructuring, with Britain’s hospitality industry set to suffer a devastating new blow from the 10pm closure of pubs and restaurants under new government restrictions.
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The use of CVAs has become increasingly controversial in recent weeks amid a backlash from property-owners about the extent to which they are being required to fund the survival plans of retailers and casual dining operators.
New Look, the fashion retailer, saw its CVA narrowly approved by creditors last month, despite a public row with the British Property Federation, which represents commercial landlords.
In an email to Wahaca staff, the co-founder and chief executive, Mark Selby, wrote: “These have been the hardest decisions of our lives and we have looked at this from every angle with the sole objective of looking after as many of our teams and restaurants as we can without having to close the business for good like so many others have had to do.”
Mr Selby praised NatWest and the company’s shareholders for being “unbelievably supportive of us as a business”.