Newspaper article The Evening Standard (London, England)

Last-Ditch Deal Saves Little Chef 'S Bacon

Newspaper article The Evening Standard (London, England)

Last-Ditch Deal Saves Little Chef 'S Bacon

Article excerpt

Byline: PETER JOHN

LITTLE CHEF, the struggling roadside restaurants chain, was poised to unveil a last-minute rescue deal this afternoon.

Entrepreneurs Lawrence Wosskow and Simon Heath, who bought the chain for [pounds sterling]52 million just over a year ago from private equity company Permira, are set to pick up just [pounds sterling]10 million.Wosskow, who holds 90% of the company's equity, had a heart attack last year and has been looking for a way out of his investment.

They are selling to Israeli property company Arazim Investments, and RCapital, a private equity group that specialises in distressed companies.

The two men raised [pounds sterling]60 million from a deal with Arazim on some of the properties last February, intending to use the cash to modernise restaurants.

But the plan failed and they brought in KPMG, their auditor, to find new cash.

Under the latest deal, the new investors will close 40 of Little Chef 's 234 restaurants but it is unclear how many of the chain's 3500 staff will be affected.

There will also be a short period of administration by accountants PriceWaterhouseCoopers for technical reasons.

The GMB union today accused Permira of asset-stripping and claimed the chain was now suffering from the "curse of the venture capitalists".

The union said Permira made a profit of almost [pounds sterling]200 million in three years after buying and then selling the restaurants group and a chain of hotels.

Little Chef started as an 11-seat restaurant in Reading in 1958, the same year the country's first motorway opened.

Famed for its [pounds sterling]6.99 all-day Olympic breakfast, it claims to have served an artery-clogging 12 million rashers of bacon and 13 million eggs and sausages to its 20 million customers over the past year.

City analyst David Buik of Cantor Index said failure to adapt to changing tastes lay behind the declining fortunes of the chain, which passed through the hands of Trust Houses Forte, Compass and Granada before falling into private hands again. …

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