On a dull Saturday, January, before Britain relaxed Covid’s restrictions, the Wolseley restaurant in Piccadilly, London was full of pre-lunch oyster swallowing customers, so the bar only had a standing room. did.
It didn’t look like a business on the verge of bankruptcy.
But this week, Corbin & King, which owns Wolseley and eight other restaurants, plummeted. For management Minor, a Thai hotel group with a majority shareholder, said the business faces “great liquidity constraints” and needs “strong financial support.”
The announcement caused a panicked call from a guest making a reservation for fear that Walsley would be permanently closed.
Minor was clear that the restaurant would continue to operate normally. But the move is the latest sign of a fierce battle to dominate a group of restaurants that count TV cook Nigella Lawson and fashion designer Paul Smith on the long roster of flashy customers. Joan Collins once declared that Walesley’s Souffle Switzerland was the best meal he had in London.
Minor, who acquired a 74% stake in Corbin & King in 2017, wanted to reduce pandemic costs and expand the Wolseley brand around the world. Jeremy King, founder and chief executive officer of Corbin & King, wants to retain control of the company he started and focus on the opening of a few in London and New York.
The battle has emerged over Corbyn & King’s default for a £ 33m loan to be paid to Minor, a hospitality group that operates approximately 2,300 restaurants in Asia and 520 hotels worldwide.
“In a decent investor situation, they [loan] Let’s create a company that won’t go bankrupt, “King said.
He went to YouTube this week and told customers that the company was “siege” by investors, but the restaurant was “rudely in good health.”
He told the Financial Times that trading was volatile, but the company’s earnings over the past seven months were higher than it was during the same period before the pandemic.
Miner said it was not “engaged in a war of words” and its “main purpose was and will continue to be the commercial success of the business.”
Like all restaurants in central London, Walsley, in a former high-ceilinged car showroom near Ritz, suffered terribly during Covid.The footprints in the city center are gradually recovering after the government’s efforts from home guidance. Ended this week.
Corbyn & King venues, including Strand’s Drone and Sloane Square’s Colbert, have been closed or traded for most of the last 22 months.
Before starting Corbyn & King with business partner Chris Corbyn in 2003, King, who ran famous London dining rooms such as Langans Brasserie and Ivy, opposes many Covid’s measures. In an email to his customer, he called the tier system, announced in October 2020, “another knee jerk, ineffective, window dressing, bat cover initiative that has not been properly considered.”
In 2020, similar sales for the Group fell 58%, according to the latest submitted accounts. Pre-tax losses increased from £ 4.9m in 2019 to £ 10.3m, halving sales to £ 22m.
It wasn’t an easy pandemic for minors either. In 2018, we acquired the Spanish hotel group NH Hotels for € 2.3 billion. This is an ambitious bet that the company’s previously Asian-focused portfolio has expanded to around 380 hotels, most of which were leased rather than freehold.
When the pandemic occurred, NH had to assume more debt to meet its leasing obligations. Despite cost savings, the average monthly loss for the first quarter of 2021 was € 29 million.
Another international hotel group’s chief executive officer described Minor’s chairman, Bill Heinecke, as an “aggressive, growth-oriented businessman,” and said, “The NH Hotel trip was the most difficult. [transaction for them]”.
Miner denied that the NH Hotel had put pressure on the finances and said, “We will continue to invest in the business as needed.”
When Miner bought the shares of Corbyn & King, part of that £ 58m investment was a £ 20m loan note to be paid in 2024. The hotel company also undertook a £ 13.25 million loan to HSBC for Corbyn & King, due in May 2020 — during the first Covid lockdown in the UK.
Miners initially reassured King and the company’s auditor not to demand a bank loan, but later said King had triggered a £ 20m loan note to repay.
According to two people close to King, while some of Corbyn & King’s brands are trademarked in Singapore against King’s intentions, King relinquishes some control over the company’s offer to recapitalize. There was a string that accompanies doing.
“There is plenty of room to expand Corbyn & King to major international markets,” Miner said, suggesting that King maintain a “customer-facing aspect” of the business while he controls the enterprise. rice field.
King not only has been fighting Covid for a long time, but also fighting with Wolseley’s landlord Company insurance companyThis month, I tried to use a recently introduced legal moratorium to protect my business — the move the miner said was “unauthorized” and urged me to submit it for management.
The restaurant recently opened a courtroom with an alternative backer, Nighthead, a US investment company that helped car rental companies. Hearts Avoid bankruptcy.
Someone familiar with Nighthead’s strategy said the fund had offered several offers to refinance Corbyn & King’s debt over the past year, but was rejected. “You can’t put the assets that Jeremy has in a 3-star hotel,” he said.
Currently, the manager of FRP Advisory is overseeing the future of the restaurant group. As a major creditor, miners have an advantage, but if there is competition to buy it, they may face having to pay more than the value of their debt to maintain control of the company.
Nick Jones, CEO of Soho House and a regular at Corbyn & King’s restaurants, said there would be a “line” of stakeholders.
Additional Report by Antoine Gala in New York
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