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CVA saves five Iberica restaurants

Published:  26 October, 2020

Spanish tapas restaurant and bar group Iberica has successfully emerged from the threat of insolvency, saving around 135 jobs and five out of seven outlets.

The tapas chain suffered as a result of its location in Central London this year. Low footfall in the area severely impacted the business’ ability to recover from lockdown. A CVA (Company Voluntary Arrangement) was subsequently approved in late September to sort through the company’s debts.

Creditors have chosen to stick by the business, however.

Iberica’s four sites in London and one in Leeds will continue to operate, though the restructuring will see the closure of its Glasgow and Manchester restaurants.

“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,” Marcos Fernandez Pardo, CEO at Iberica said.

“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.”

Today, the business said a key factor in the CVA negotiations involved the introduction of a flexible rent period. Landlords will now 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, paid tribute to the “overwhelming support of the landlords and wider creditors”.

“Iberica 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,” he said.