Revolution Bars Group had its restructuring plan approved by the High Court, enabling cost cutting, bar closures, and rent reductions, with the group forecasting £3.8 million in additional annual earnings.
Revolution Bars Group (LSE:RBG) shares closed Thursday’s session, rising 13.5% to 1.25p, after the firm’s restructuring plan obtained the approval of the High Court.
It means that ‘Revs’, the British vodka bar chain that launched in Manchester in the late nineties and subsequently expanded across the UK’s bar-streets, will be allowed to rework its debt arrangements with its bankers.
Whilst the group’s route to revival is now in play, the restructuring will see a major phase of cost-cutting that will result in job losses.
Revolution intends to close 25 bars around the UK, across both the vodka bar and Revolución de Cuba rum bar brands. At sites it retains the company intends to reduce its rents.
The company had expected to run out of cash this month, had the plan been denied. It now expects to generate £3.8 million per year of additional earnings from its actions.
Restructuring was deemed to be the preferred option for key stakeholders, after a review that considered breaking up and selling of its assets.
