£16.5m cash injection for Revolution Bars Group to fight Covid crisis

In a banking facilities update today (26 May), the operator of 74 bars trading under its Revolution and Revolución de Cuba brands revealed that NatWest had agreed to further increase its overall debt facilities using the Government’s CLBILS.

As previously reported by The Morning Advertiser ​(MA​) on 14 April, Revolution announced its lending bank had agreed to increase its overdraft facility​ from £21m to £30m until 31 August 2020. 

The group added that from the start of September, this facility would be reduced to £24m following an assumed recommencement of trade in July 2020.

However, in its latest show of financial support, NatWest will provide the group with a £16.5m term loan maturing on 30 June 2023, when it will need to be repaid or refinanced. The loan will be amortised by £1m per annum with the first repayment occurring in June 2021.  

With the new facilities in place, the group’s total debt now stands at £37.5m until June 2021 when it will reduce to £35.5m until at least June 2022.

Stable financial position

As part of its strategy to ensure the long-term future of its business, Revolution Bars Group announced on 14 April that it had furloughed 2,775 members of staff – 98% of its workforce – and halved the salaries of its CEO, CFO and non-executive directors alongside broader pay reductions for senior staff members still at work.

The same statement also confirmed the group had cut its running costs to approximately £400,000 per week.

While Revolution’s net debt stands at £22m, its board is confident that the group will have sufficient liquidity for the foreseeable future – even if its trade is negatively impacted by Covid-19 once sites reopen. 

“Again, we welcome and are delighted with the additional support from NatWest,” Revolution's CEO Rob Pitcher explained. “They continue to act as a true partner to our business and this decisive action will enable us to emerge from this crisis in a financially stable position.

“When restrictions are lifted, we will reopen with much caution – prioritising the health and safety of our employees and guests above all else. 

“However, with the security of a stable financial position and underpinned by our young guest base, we believe the group is well placed to return to good levels of trading reasonably quickly.”

As part of its revised facilities, Revolution has also cancelled the pavement of dividends while the group’s term loan remains outstanding in line with the CLBILS terms and conditions.

Revolution’s additional funding follows news that Lincolnshire-based specialist hotel and coaching inn operator, The Coaching Inn Group, had see an additional £2.5m in funding approved under the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS).​

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