The report from its administrator Zolfo Cooper said that following its restructure in 2012, Bramwell’s trading performance “continued to be disappointing”, with EBITDA “well below forecast and a large number of pubs making limited or no contribution to Bramwell’s fixed cost base”.
Initial reviews for its new Wild Lime Bar Kitchen were “mixed” and capex for a national roll-out of the format nationally was not available. In the meantime trading performance across the estate “continued to deteriorate” and in September it was decided that a sale of some of all its pubs was appropriate.
Cash position 'continued to deteriorate'
One party - Stonegate - showed serious interest and while negotiations progressed, Bramwell’s cash position “continued to deteriorate” and “it became clear that Bramwell would require significant third party funding as the cash required was forecast to exceed the cash generated by trading”.
“Management commenced discussions with its lenders in order to obtain a facility to meet Bramwell’s short term cash flow needed. However, the position became critical when one of its major suppliers reduced Bramwell’s credit terms with immediate effect and demand phased payments totalling £2.2m to bring them back within terms.
“This placed significant additional pressure on Bramwell’s cash flow and it became increasingly apparent that Bramwell would not be able to pay its creditors as they fell due and continue trading until completion of a sale.
“In order to preserve value and affect the sale, the decision was taken to place Brawmell, together with its parent company, Pubco, into administration.”
Pubs closed
Zolfo Cooper closed 29 pubs on appointment - and subsequently shut a further four due to “poor trading performances”. On 15 November 78 were sold to Stonegate for £34m (£14m on deferred terms) and following the sale, 69 pubs were given to Christie + Co to market.
Secured creditors are expected to recoup £35.5m of the £47.4m owed to them, while unsecured creditors are expected to get back hardly any of the £13.2m they are owed. The amount due to Varde and Apollo, Bramwell’s funders, is £8.4m and £34.7m respectively, the report says.