While three quarters (75%) of creditors needed to approve the arrangement, more than 88% of all creditors voted in favour of the proposal and more than 75% of unconnected creditors voted in favour.
In accordance with the relevant statutory provisions, there is a 28-day period following the filing of the report, in which a creditor may apply to court to challenge the CVA.
Revolution Bars Limited includes 51 Revolution branded leasehold bars and following the CVA approval, six bars will close imminently and reduced rental terms have been agreed in respect of seven other bars that are now subject to turnover-based rents with minimum rental thresholds for the duration of the two year CVA period.
The multiple operator also revealed an update on its financial position. The group estimated its cash flow (before one-off costs implementing the CVA of about £1.1m) will improve over the two-year period of the CVA by about £4m.
Net bank debt is currently £13.5m compared to current committed bank facilities of £37.2m, which reduces to £29.3m at the end of March next year and to £28.1m at the end of June 2021.
Predicted cash burn
Under the terms of the CVA, £1.3m of rent and service charge arrears will be paid on 20 November 2020.
The group’s cash burn rate, if all bars are subjected to an enforced closure and assuming the continuation of the current Coronavirus Job Retention Scheme and other Government reliefs, is estimated to be around £400,000 a week.
While there remains significant uncertainty due to the pandemic, the board is encouraged by the possibility of a vaccine potentially being available by Christmas, suggesting revenue generation could return to move normal levels throughout 2021, the group said.
The group also announced board changes following the completion of the CVA process with chief financial officer Mike Foster indicating he will not seek re-election at the group’s AGM on 22 December and will step down from the board at the end of that meeting.
The board also revealed it is intended Danielle Davies will be appointed as chief financial officer immediately following the AGM.
Now the CVA has been approved, the group will report its final results for the 52 weeks to 27 June 2020 on 17 December.
Revolution Bars Group CEO Rob Pitcher said: “I’m grateful for the support of our creditors in approving the CVA of Revolution Bars Limited, providing the opportunity for the business to move forward with much greater certainty for all its stakeholders.
“This is a positive step in the right direction for the business. However, while we welcome the support the Government has given, the hospitality sector has been severely affected by their often illogical, inappropriate and disproportionate response to the coronavirus pandemic.
“To plan ahead, we still require guidance on how the sector can ultimately exit the current restrictions in a safe and timely manner.
“With phase one of the vaccine roll out potentially commencing in December and set to protect 99% of the UK’s at risk population, we have some potential indication of a timeline to normality, which will save jobs and allow us to resume delighting our customers again.
“Throughout this pandemic, the safety and welfare of our teams and guests has remained our primary focus and I would like to recognise the integrity and determination shown by all our colleagues over the past eight months.”