The Chimichanga restaurant at Xscape is set to close after it was revealed that Prezzo owes over £400,000 in rent payments across its four Milton Keynes restaurants.
But the Prezzo stores at Kingston and Stadium MK and the Chimichanga restaurant at Stadium MK are set to be saved, if the new company voluntary restructuring arrangement is approved by the companies creditors.
A CVA is a statutory procedure designed to help a company form a compromise or arrangement between it and its creditors.
Prezzo’s proposed CVA will allow it to reduce the rent paid on some sites to affordable levels and enable it to terminate leases at sites that would not be economic even with a reduced rent.
At present, Prezzo owes £123,798.45 to Xscape on its Chimichanga site which will close if the plans are approved. The proposals would see a rent reduction applied for eight weeks on this site following agreement after which point the lease will be terminated
They also owe £95,036.53 to TBL Milton Keynes Ltd for rent on the Kingston Prezzo site, as well as £253,701.14 to The Crown Estate Commissioners for rent on two sites it currently leases at Stadium MK (home to both a Prezzo and Chimichanga).
Prezzo has said that the three Milton Keynes restaurants which are due to remain open are profitable at the current rent and they will be kept without rent reduction with monthly rent payments for 24 months.
To become effective, a CVA requires the approval of at least 75% (by value) of a company’s creditors. Once approved, a CVA is binding on all creditors, including any creditors who did not vote or voted against the proposal.