Unsecured creditors of Burger King franchises which include Great Yarmouth, Bury St Edmunds and Wisbech face shortfall of £20m
Two East Anglian companies, which together operate more than 30 Burger King outlets across the UK, are likely to have left unsecured creditors short by almost £20m, documents have revealed.
Millcliffe Ltd and CPL Foods Ltd were placed in administration earlier this year under the control of administrators at business advisory firm AlixPartners.
But documents recently submitted to Companies House have shed light on the debts of the businesses, which are both based in Ipswich, and the reasons why they have been put into administration.
At the date when the administrators submitted their Statement of Proposals on May 30, the businesses employed a total of 868 staff and operated 53 restaurants across the UK, 36 of which trade under the Burger King brand and 17 under independent brands such as El Taco Loco and Roosters. The portfolio includes Burger King outlets in Bury St Edmunds, Great Yarmouth and Wisbech.
Administrators have agreed a support package, so the businesses can continue trading and be sold as a going concern. “This strategy is intended to minimise any redundancies that would otherwise have been unavoidable in a liquidation scenario” said the report which states the administrators are currently assessing three offers for the business.
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The report says that the businesses experienced a period of rapid expansion from 2013 to 2016, adding a number of restaurants to their portfolio. “This expansion was funded by a combination of cash flow generated by the businesses, bank debt and landlord contributions specific to each site,” it said.
Delays to some of the sites opening, and trading from some established sites that “was significantly below the expectations of the directors” led to “severe cash shortages across the businesses”.
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A winding up petition was issued by HM Revenue and Customs against Millcliffe on March 10 relating to unpaid PAYE, NICs and VAT of around £625,000. This was suspended on April 7 when the administrators were called in.
The administrators have stated the estimated debt of the unsecured creditors of the two companies totals approximately £9.7m and £9.8m for CPL Foods and Millcliffe respectively.