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Could £12.5m emergency fundraising save Aberdeen and Inverness Revolution bars?

The group's board has proposed a restructuring plan.

The Revolution bar on Belmont Street, Aberdeen.
The Revolution bar on Belmont Street, Aberdeen. Image: Scott Baxter/ DC Thomson

The owner of two Aberdeen bars and another in Inverness has announced an emergency £12.5 million fundraising.

Revolution Bars Group has proposed a restructuring plan of the company while also exploring a formal sale process.

The group said it has faced a period of “external challenges” which have impacted its business and trading performance.

In the announcement, made once markets closed yesterday, it proposed to raise up to £10.5m for a placing and up to £2m more via the placing and opening offer.

Revolutions bars operates a venue on Belmont Street in Aberdeen and another on Church Street in Inverness.

The Academy Centre’s courtyard is home to one of the group’s Revolucion de Cuba cocktail bar and restaurants.

Emergency fundraising backed by well-known investor

Luke Johnson is a former chairman of the Pizza Express chain, the Royal Society of Arts and Channel 4.

The investor and entrepreneur has pledged £3m, while Robus Recovery Fund II has done the same.

Three key existing shareholders have also pledged £3.5m.

The group’s board has proposed Mr Johnson will join the Board as a non-executive director once the the restructuring and fundraising is in place.

 

Revolution Bars has faced “external challenges” impacting trade performance. Image: Scott Baxter/ DC Thomson

It would be with a view to him being proposed to take on the role of chairman at its AGM this year.

The fundraising proceeds will be used to set up the restructuring plan — primarily impacting the Revolution branded sites.

It will also be used to provide additional working capital and is expected to enable the company to recommence a site refurbishment programme from 2026.

If successful, Revolution Bars will also use the funds to explore site acquisition opportunities for its Peach and De Cuba trading sites.

However, if the firm doesn’t go ahead with a fundraise or making cost savings from restructuring it expects to face “liquidity pressures” next year.

Revolution Bars board’s decision can help group ‘grow and flourish again’, says chief executive

The group’s chief executive Rob Pitcher said the board has had to consider “all strategic options” to make sure the best outcome is reached.

Revolution Bars Group mooted a sale of part or all of the group last month when responding to “press speculation”.

He said the decision comes on the back of a period of “macro-economic and external challenges” — impacting both the company and Revolution’s young customer base.

Mr Pitcher said: “The Board has had to consider all strategic options for the Group to improve its future prospects and provide the best outcome for all stakeholders.

“After much consideration, the board concluded that a plan to restructure the business, together with a fundraising of up to £12.5m and to simultaneously launch a formal sale process would deliver the best value.

Revolucion de Cuba in the Academy Centre courtyard in Aberdeen.
Revolucion de Cuba in the Academy Centre courtyard in Aberdeen. Image: Scott Baxter/ DC Thomson

“We are driven by the imperative to deliver to stakeholders a business which is fit for purpose in today’s environment.

“Better balanced and financed in a way to provide a sustainable long-term future for the Group which, in time, has the opportunity to grow and flourish again.”

The group published its interim results alongside the proposal which show a pre-tax profit of £3.1m in the six months to December.

It compares with a loss of £91,000 for the previous year. Its revenue also rose to £82.3m up from £76m.

Venues could still close

As an alternative to the restructuring plan, Revolution Bars also launched the formal sale process.

This allows the group to explore which would  provide a more beneficial outcome for stakeholders.

The company is also looking at whether sales of one or more of its subsidiaries or assets would be the best end result. Up to 18 of its locations could close as part of the restructuring plans.

It confirmed it’s not currently in any discussions with potential buyers.

Its share price shot up by more than 40% this morning.

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