Prezzo has confirmed that it is seeking a Company Voluntary Agreement (CVA) and closing 94 sites.
The move will include the closure of all branches of the group’s Tex-Mex brand Chimichanga and redundancies among its approximately 4,500 staff.
Related Article: Prezzo expected to announce CVA involving restaurant closures
If creditors agree, the Italian restaurant’s remaining 208 sites will continue to trade, with rent reductions of up to 50% sought.
The Caterer understands that Prezzo will request rent reductions of 50% for one year at 22 sites, and 25% for two years at 39 sites.
The group plans to create a strong core estate, with restaurant redesigns already underway at top performing sites to bring a “new look and feel”.
Though the terms of the CVA would normally mean the chain defaults on its £155m debt, it has received a waiver from lenders.
Earlier this year it was revealed that the brand, owned by American private equity business TPG, had appointed consultants at Alix Partners to oversee a financial restructuring.
Prezzo is the latest restaurant to be hit by tough trading conditions affecting the casual dining sector, and the news follows recent announcements that Jamie’s Italian and burger chain Byron have entered into CVAs.
Prezzo was acquired by TPG in 2014 for £304m from the Kaye family, who founded the business in 2000.