LEGAL | Staff Reporter, UK

LEON exploring CVA, will likely seek permanent rent cuts: report

The company traded from more than 75 sites before the pandemic.

LEON is exploring an insolvency mechanism in an attempt to preserve itself during the coronavirus pandemic, Sky News first reported.

The chain is understood to be drawing up proposals for a company voluntary arrangement which is likely to involve seeking permanent rent cuts from landlords.

The news agency also understands that LEON is working with advisers on its plans, which are at an “early stage” with implications for jobs and restaurant closures unclear as on 23 November.

In an statement sent to QSR Media last 27 November, LEON CEO John Vincent confirmed the plans for a CVA.

"In the previous four years we had increased our average restaurant sales by 40% and planned to open 30 new restaurants in 2020. Instead, as a result of this second lockdown our sales are 70% below last year and this is unsustainable," he said.

"In light of this, the most likely and constructive way to move forward with our landlords is through the framework of a CVA. We stayed open to serve NHS and other key workers throughout this pandemic. Once everyone else returns to city centres and travel hubs we fully expect LEON to grow again, and we will be ready to welcome back our exceptionally supportive customers."

The article has been updated to include LEON's statement.

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