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Cafe Rouge parent gets cash injection from lenders after debt for equity swap 

The owner of the Cafe Rouge and Bella Italia ­restaurant chains has had its finances restructured by its lenders in a deal that safeguards its future.
Casual Dining Group – which operates about 280 mid-market restaurants in the UK with 7,500 employees – has agreed a debt-for-equity deal with US private equity giant KKR and Pemberton Asset ­Management.
The funds will write off some debts and pump ?30m into the business, which also owns the La Tasca and Las Iguanas chains.
The rising costs of ingredients and drinks, higher wages and increasing business rates have put intense pressure on mid-market restaurants, which also face fierce competition from ­rivals as they battle for consumers’ stretched wallets.
Recent casualties in the sector have included Carluccio’s and Jamie’s Italian. These two businesses used company voluntary arrangement deals to shut outlets and win rent ­reductions.
Cafe Rouge parent gets cash injection from lenders after debt for equity swap 

Casual Dining Group also owns the Las Iguanas chain  

Credit:
Julian Andrews
However, Casual Dining Group's chief executive Steve Richards says the refinancing and cash injection allows the business to look to the future with certainty and target growth.
He said he was "delighted" to have agreed  "substantial new investment which establishes a strong foundation to continue to invest in our brands and take advantage of opportunities in the sector as they arise”.
Mr Richards said the company is outperforming the market despite a "challenging backdrop" with sales up nearly 5pc  in the past 14 weeks and "double digit profit uplift".
The chief executive added that the business has opened seven new concessions in airports and hotels since the start of the year with and has "an active schedule of UK owned and international franchise new openings in the pipeline".
According to Casual Dining Group’s last annual ­accounts, its pre-tax losses widened last year, despite revenue rising by 10pc to ?329m.
In July last year, the company refinanced ?185m of credit facilities with its ­lenders.
The business has also drawn loans of ?35m from shareholders over the past year and a half.
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