Wed 07/15/2020 11:24 AM
Relevant Documents:StatementFY’18/19 Report
U.K. entertainment group Buzz Bingo has today launched company voluntary arrangement, or CVA, proceedings to restructure its retail portfolio, according to a statement. The Caledonia Investments-owned group seeks to permanently shut 26 of its 117 clubs in an effort to secure a sustainable long-term future for the business following the outbreak of Covid-19 and resultant lockdown.
Alix Partners are acting as CVA nominees for the company, according to sources.
Caledonia Investments is expected to provide an additional £22 million of equity capital once the CVA becomes effective. The group’s existing lender is expected to provide £10 million of debt to Buzz Bingo, according to the statement.
Buzz Bingo has a seven-year £155 million term loan with ICG which pays interest of LIBOR +7% and matures in December 2022. The group further has access to a £15 million working capital facility from Barclays with interest of L+3%, according to its full-year 2018/19 earnings report, the latest available.
Buzz Bingo will seek creditor approval of the CVA Proposal which is due on Aug. 3, the company said.
Buzz Bingo was forced to close all its clubs across the U.K due to pandemic-related lockdown measures and they have remained closed since March 21. It put measures in place such as reducing senior management pay and making use of the government’s furlough scheme for the majority of employees. It said it intends to resume operations on Aug. 6.
In the year to January 2019, the group reported revenue of £264 million compared with £276 million the previous year. It reported a loss of £15.2 million compared with a profit of £79.6 million the prior year.
Buzz Bingo operates 117 clubs across the U.K. and employs 3,400 staff.
-- Lara Gibson