The business, which operator of bars and gastropubs, trading mainly under the Revolution, Revolucion de Cuba and Peach Pubs brands, added it is not in receipt of any approaches for the company currently.
This means Revolution is no longer in an ‘offer period’ as defined by the city code on takeovers and mergers and wants to go ahead with its restructuring plan as stated in April, which involves fundraising £12.5m.
It warned administration for the business is ‘expected’ if shareholders do not give the green light to the restructuring plan.
Several proposals received
Revolution added: “For the avoidance of doubt, the M&A process, which, as previously disclosed, resulted in several proposals being received for the acquisition of certain of its subsidiaries and/or business and assets owned or operated by certain of the company’s subsidiaries, will progress if the fundraising is unsuccessful and the restructuring plan is no longer capable of being progressed.
“As previously disclosed, none of the proposals presented (or any combination thereof) would result in a financial return to shareholders.”
Revolution was approached by Nightcap but rejected its proposal leading to the Sarah Willingham-led business saying it was “disappointed” with the outcome.
Revolution said on Friday (31 May 2024) the restructuring plan would enable the company to restructure certain of its liabilities, this includes amending and extending the group’s secured lending facilities, exiting the leases of certain loss-making sites, and proposing a rent reduction on certain other sites to enable them to return to profitability at a sustainable level.
This move, Revolution expects, will return the company to profitability – leading to a £3.8m improvement in group adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) in FY25) and stated it is “in the best interests of all stakeholders”.
Funding of £8.1m needed by 7 September
It added if the go-ahead was not received from shareholders by 15 August 2024, the fundraising, which is conditional upon the successful implementation of the restructuring plan, would not conclude.
Revolution added: “Creditor support, which is dependent on the restructuring plan being successfully sanctioned, would cease and in those circumstances, per management’s short-term liquidity forecast to the end of September 2024, the group is forecasting an immediate £0.7m funding requirement in the week ending 24 August 2024 with an estimated peak funding requirement of £8.1m in the week ending 7 September 2024.
“In those circumstances, it is expected the directors of the plan company and certain other group entities would file for administration to comply with their directors’ duties obligations and to protect the interests of creditors.”
It also warned the group is forecasting a statutory loss before tax of approximately £15m in the year to 29 June 2024 under IFRS 16 after all exceptional items and impairments associated with the restructuring plan.