Buzz Bingo to close 26 venues in proposed restructure15th July 2020 11:39 am GMT
UK bingo operator Buzz Bingo is proposing to restructure its retail estate through a company voluntary arrangement (CVA), which will see 26 bingo clubs closed permanently and nearly 600 staff made redundant.
It follows a period of consultation with Buzz Bingo’s various stakeholders, including its landlords, aimed at securing a sustainable long-term future for the business following the COVID-19 outbreak and resultant lockdown.
Under the proposed terms of the CVA, 91 Buzz Bingo clubs will continue to trade, while 26 clubs will close permanently as a result of the unsustainable operating environment, potentially impacting 573 of Buzz’s 3,400 staff across the business.
As with many others in the leisure and entertainment sector, Buzz Bingo’s clubs have remained closed across the UK since 21 March, with the operator minimising costs where possible, reducing senior management pay, and making use of the government’s furlough scheme for the vast majority of employees.
While Buzz Bingo intends to commence the reopening of its clubs from 6 August, the operator expects that it will take time for footfall to return to pre COVID-19 levels due to social distancing measures and customer confidence to socialise indoors taking time to rebuild, particularly among Buzz Bingo’s customer group.
Buzz Bingo’s owner, Caledonia Investments, has indicated its willingness to provide an additional £22m of equity capital, in addition to the £5m that was invested in May, once the CVA becomes effective.
The new equity capital will be augmented with an additional £10m of debt provided by Buzz Bingo’s existing lender.
“The ongoing pandemic has had far-reaching consequences for the entire leisure and hospitality sector and an immediate and significant impact on our business,” said Buzz Bingo CEO Chris Matthews. “Following a thorough review of our options, the proposed CVA will restructure our retail portfolio to ensure we are well positioned for a return to growth, while adapting to the ongoing, challenging environment as we start to reopen the majority of our clubs.
“Our lenders are supporting our plans and our owners, Caledonia will be investing into the new structure to further strengthen our future business. The restructure will, very sadly, impact a number of our colleagues and my priority is to support all those affected and keep them fully informed as we continue with this process. I would like to thank every single one of our colleagues for their continued understanding and commitment over this period.”
Buzz Bingo will now be seeking creditor approval of the CVA proposal, which is due on 3 August. The Playtech-powered online bingo business will continue to trade as usual during this period.