Hey Prezzo: Making Landlords Disappear

Posted on May 10, 2023. by NTI

We have all had the conversation: "Do you want to go somewhere nice to eat this evening?"

"Where do you have in mind?"

"I don't know. Can't you decide? You know, somewhere ... 'nice'."

"Oh, let's just go to Prezzo. I've got a voucher."

You then have some murdered crispy mozzarella, a bit of penne and stop at the garage for a Cadbury's Fruit and Nut on the way home. 

Soon you will have less of a choice. It has been all over the web in the past couple of days. Prezzo are in trouble and want their landlords to share the pain. The restaurant group is reported to owe around £32 million in a loss-making operation and changes are around the corner. FRP is working with CEO Dean Challenger and his team which announced last week that it was axing 46 outlets with the loss of more than 800 jobs.

Landlords of some of its 143-strong estate should be receiving letters around ... now, notifying them of the legal process through which it intends to shut unprofitable stores. This 'legal process' is known to you and us as a Restructuring Plan under Part 26A of the Companies Act 2006, slotted into that statute nicely following the self-destruction of CIGA 2020. Under the Plan some of the landlords will be asked to vote in fvaour of an option which will offer them a rent 'haircut' or terminate their leases altogether, but they may also be placed into a class of creditors which will not be required to vote in favour of the Plan at all ... we in the NTI newsroom see a cross-class cram down coming on.

This is all about soaring energy costs and double-digit inflation on many of the staples bought as ingredients by Prezzo to make their gastronomic magic.

The clever money says that landlords, who include some of Britain's biggest commercial property-owners, will be able to vote at a hearing on 22 May about the Restructuring Plan. There will be a lot of squirming and a great deal of noise, but insiders says the Plan will be pushed through as Cain International is both Prezzo's largest creditor and its owner.

More reports to come, we feel ... 

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