The Apprentice star Lord Sugar wants to block a rescue deal for a Tayside and Fife-based coffee chain.
Billionaire Lord Sugar, who has extensive commercial property interests, has lodged a challenge against a restructuring deal for Caffe Nero.
The UK’s third largest coffee chain asked landlords for better terms and warned that closures and job losses may follow.
The company voluntary arrangement (CVA), which would see landlords forfeit most of their outstanding rent payments, received 90% support.
Legal challenge
But Lord Sugar’s Amsprop Investments is among seven parties which have lodged a legal challenge to block Caffe Nero’s CVA.
The bid hinges on a late takeover bid by EG Group ahead of the CVA vote last month.
Landlords were promised full payment of rent arrears as part of a takeover offer.
According to Sky News, Caffe Nero’s directors refused to adjourn the CVA vote despite the bid – a refusal contested in court documents.
It is claimed EG’s owners Mohsin and Zuber Issa are underwriting the cost of the legal process.
EG Group, which has a petrol station empire, is also in the process of buying Asda.
Defend the challenge vigorously
A Caffe Nero spokesman said: “We are aware a challenge has been filed by a small number of landlords at what appears to be the instigation of a third party.
“We still firmly believe the terms of the CVA, which passed with over 90% support, are in the best interests of all our creditors and we will openly engage with any landlord who wishes to discuss it further.
“We intend to defend the challenge vigorously.
“In the meantime, we remain focussed on managing the business through the current Covid-19 enforced trading restrictions, and re-growing our sales in the months and years ahead.”
Caffe Nero’s Tayside and Fife operation
Caffe Nero runs 800 shops in the UK, employing about 6,000 people.
Founded in 1997 by chief executive Gerry Ford, it operates in 11 countries with a total of 1,000 stores.
The coffee chain operates from Brook Street in Broughty Ferry, Perth High Street, Dunfermline High Street and Dundee’s Murraygate.
It has been impacted by reduced footfall in city centres as millions of people work from home.
Operating in the same sector, Pret A Manger and Costa Coffee have also made job cuts.
