Wahaca’s lenders have agreed to write off millions of pounds of debt to keep the Mexican restaurant chain afloat.
Wahaca, co-founded by Masterchef winner Thomasina Miers, has launched a company voluntary arrangement that will see its shareholders and lenders give the business a £5m cash injection to help return it to an even keel, Sky News first reported.
As part of the restructuring deal, NatWest is said to have agreed to write off the £13m it is owed, while shareholders are also writing off the £12m previously loaned to the business.
It comes after Wahaca said it would shut about 10 of its 30 sites as part of the CVA as it blamed high rental costs in city centre locations which made running them “untenable”.
The chain, which employs about 1,000 people, said it would try to save as many as jobs as possible and has not confirmed whether redundancies have already occurred.
Co-founder Mark Selby said: “We have every confidence that the outcome of this will allow us to focus positively on the future by continuing with our reopening programme, as well as an ongoing dedication to our core offering of sustainable, high quality, fresh food and a fantastic customer experience - with the aim of strengthening the position of our remaining sites and returning to growth as the market recovers.”
Wahaca opened its first restaurant in Covent Garden in 2007, two years after Ms Miers won the BBC cookery competition.
It is among a string of restaurant chains and retailers to launched CVAs in recent months in a bid to cut costs during the pandemic. In addition to closing sites, a CVA will also enable Wahaca to negotiate reduced rents with landlords.
In an email to Wahaca staff, Mr Selby said the company's lenders and shareholders had been "unbelievably supportive of us as a business".