Relevant Documents:Press Release CROPress Release Q3Q3 Financial StatementPress Release Covid-19Press Release Insolvency
German restaurant chain Vapiano said today it is currently insolvent and will have to formally file within three weeks if it is unable to secure liquidity through state aid or other means. The company previously announced a short-term liquidity need of at least €13.6 million as a result of the Covid-19 outbreak.
Under the German Covid-19 state aid package, companies can apply for “Kurzarbeitergeld”, where the government pays for part of staff wages and for guarantees and credit lines from the Kreditanstalt für Wiederaufbau (KfW), which can be applied through companies’ relationship banks. However, Vapiano said the application is not straight-forward so there is currently a delay and has appealed to the government to make access easier and faster.
The chain was forced to close almost all of its 230 restaurants globally and is not generating any revenue. 144 restaurants are operated by the group itself and 91 restaurants are run by franchises. The group’s first quarter revenue was down by about 20% year over year.
The group generated €295.5 million in sales in the nine months of 2019, which was an increase of 9.3% year over year. However, on a like-for-like basis sales were down 4.2%. It achieved an EBITDA of €38.2 million in the first nine months compared with €11.8 million in 2018. However, without the application of IFRS 16 in 2019, EBITDA would have been €31.9 million Net cash flows from operating activities was €22.6 million compared with €2.5 million a year earlier.
Long-term debt as of end of September was €425 million.
The group’s financing banks and shareholders Mayfair Beteiligungsfonds, VAP Leipzig and Exchange Bioset provided about €30 million in debt instruments to support the operational restructuring of the group in May 2019. The company also appointed Johan Stohner from Alvarez & Marsal as CRO in June 2019 and has been working with Freshfields and CFC Hamburg.
The company has subsequently come to an agreement in the first quarter for an additional €10.7 million in liquidity from the financing banks and shareholder VAP Leipzig and Exchange Bio GmbH, which has not been finalized yet.
Additionally, the company’s banks agreed to covenant resets for existing credit lines. However, the implementation of the agreement is now dependent on state aid through the Covid-19 measures.
--Aurelia Seidlhofer