(Alliance News) - Revolution Bars Group PLC on Friday said a UK court has approved plans intended on resolving financial challenges which emerged following the Covid-19 pandemic.
The Manchester-based premium pubs and bar company is the operator of the Revolution and Revolucion de Cuba brands.
Revolution Bars shares were up 15% to 1.27 pence each in London on Friday morning.
In May, the company announced restructuring plans with the stated objective to restore financial stability and provide a platform for recovery from post-pandemic trading challenges in recent years.
In financial 2023, a GBP22.2 million pretax loss was recorded, swinging from a GBP2.1 million profit the previous year.
The restructuring involves amending and extending existing secured lending facilities, exiting the leases of certain loss-making sites, and implementing necessary rent reductions on certain locations to facilitate a return to profitability at a sustainable level.
On Thursday, the plan was sanctioned by the court.
After implementing the plan in full, the business will operate 27 Revolution Bars, 15 Revolucion de Cuba Bars, 22 Peach Pubs and one Founders & Co site. At the end of financial 2023, the company had 89 sites in total including 46 Revolution Bars.
Management expects the plan to deliver an annualised earnings before interest, taxes, depreciation, and amortisation improvement of GBP3.8 million.
As announced in April, Revolution will also raise GBP10.5 million via a firm placing and subscription at 1 pence per share and GBP2.0 million via a placing and open offer at the same price.
The fundraising is expected to occur on or before September 3.
Without such funding, and cost savings delivered through the restructuring, Revolution Bars said it would face liquidity pressures from the first quarter of financial 2025 onwards.
Chief Executive Officer Rob Pitcher said: "We are very pleased that the court has sanctioned the restructuring plan... The group is now well diversified across the key brands, providing a more secure financial base and we look forward to the future with improved optimism."
Revolution Bars confirmed its net debt increased 2.6% to GBP23.8 million at August 8 from GBP23.2 million on October 15.
Ebitda outturn at the end of financial 2024 is expected to be approximately GBP3.0 million.
By Elijah Dale, Alliance News reporter
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