Pizza Hut in Southport has been saved after creditors and landlords agreed to the company’s proposed restructuring plan.
Under the Company Voluntary Agreement, the chain’s landlords have agreed to receive reduced rent for 215 restaurants, including the restaurant at Ocean Plaza in Southport.
The venue will be among those which will now remain open, keeping 5,000 jobs safe.
However the company will still go ahead with plans to shut 29 under-performing restaurants, putting 450 jobs at risk.
A Pizza Hut Restaurants spokesperson said: “We are delighted to have reached such a constructive position in partnership with our landlords and creditors.
“We appreciate the support of everyone involved and this outcome provides us with a strong platform to secure the long-term future of the business including over 5,000 jobs and over 200 restaurants.
“Our focus is now ‘business as usual’ supporting all of our team members and continuing to provide a Covid-safe restaurant experience for our guests.”
A CVA is a deal struck between a company that has run out of money and its creditors. It puts a legal ring-fence around the firm to ease pressure from its creditors, such as HMRC, the Pension Protection Fund and landlords.
Generally, it means a business is allowed to exit leases on unprofitable stores, and is granted better terms by landlords.
The CVA will only affect Pizza Hut Restaurants franchises – not its Pizza Hut Delivery business, which is operated separately.
If a vote had not passed, the chain could have collapsed without extra funding – a CVA can only be granted by the courts if a company can show it will face administration without the support.
But unlike administration, CVAs are adopted by businesses that, although extremely distressed, still have a shot at survival.
High street chains such as Pizza Express, Yo! Sushi and Byron Burgers have all used CVAs during the pandemic to secure restructuring deals with major site closures.
The Pizza Express deal saw the firm close its restaurant in the Old Bank building on Lord Street in Southport, which was previously occupied by Ask.
Pizza Hut, which was founded in the US in 1958, had put forward plans for a CVA earlier this month after saying that “sales are not expected to fully bounce back until well into 2021” – despite a quick and safe reopening of sites.
Pizza Hut restaurants set to shut are:
– Basingstoke Retail Park
– Brighton City Centre
– Bury St Edmunds
– Cambridge, Regent Street
– Cardiff, Culverhouse Cross
– Chelmsford, Moulsham Street
– Croydon, North End
– Cumbernauld
– Dunstable
– Glasgow, Great Western Retail Park
– Grantham
– Gravesend
– Huddersfield, John William Street
– Leicester, Haymarket
– London, Leyton Mill
– London, Stratford
– Maidenhead
– Maidstone
– Newcastle-under-Lyme
– Oxford
– Plymouth Royal Parade
– Salisbury
– Scarborough
– Sheffield, High Street
– Sheffield, Penistone Road
– Stafford
– Thornton Cleveleys
– Weston-Super-Mare– Worcester
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