Ibérica undergoes CVA with closure of two restaurants

Spanish restaurant group Ibérica has undergone a Company Voluntary Arrangement (CVA), with the closure of two restaurants.

Around 135 jobs have been saved by the restructuring plan, which leaves the business with four sites in London and one in Leeds. Ibérica's restaurants in Glasgow and Manchester (pictured), the areas subject to the toughest coronavirus restrictions, will close permanently.

Marcos Fernandez Pardo, chief executive at Ibérica, said: "We're pleased to have reached an agreement that's in the interest of all parties. We're thankful to all of our landlords, Santander and our creditors who entered this process with an open mind and in good faith.

"Our combined efforts to allow flexibility to sustain this period of uncertainty, protecting the interests of all stakeholders, have secured an arrangement that we believe secures the future of this organisation, and its continued success."

Over 99% of creditors, including the chain's landlords, voted to approve the plan in late September.

The CVA negotiations involved the introduction of a flexible rent period whereby landlords will offer a rental concession up until the end of July 2021. During this period sites will concede quarterly rent in arrears amounting to 10% of their ongoing revenue.

Gordon Thomson, director at RSM Restructuring Advisory LLP, said: ‘It's hard to overstate the unpredictability and nature of the challenges that this sector faces, especially in central London which continues to suffer from low footfall.

"Ibérica has a business model that is credible and sustainable in the longer term. The approval of this CVA and the creativity and buy-in involved, with the overwhelming support of the landlords and wider creditors, is testament to that, and shows how stakeholders are prepared to support businesses with a compelling operating model until the trade returns."

Ibérica was launched by Nacho Manzano, the chef behind Michelin-starred Spanish restaurants Casa Marcial and La Salgar, and Marcos Fernandez Pardo in London in 2008.

It joins a growing number of restaurant groups which have undergone CVAs since the pandemic forced businesses to close in March, including Wahaca, Pizza Express and Thai Leisure Group.