Chilango, the Mexican food restaurant chain, has secured a rescue deal which will allow the business to continue serving customers from 10 of its 11 restaurants and preserve around 130 jobs.
Investment group RD Capital Partners (RDCP), run by founders, Sameer Rizvi and Iryna Dubylovska, has agreed to acquire the business from the administrators of Mucho Mas Limited (the Chilango group’s trading entity) following a competitive sales process.
Launched in 2007 to bring authentic Mexican food to London, Chilango quickly grew in popularity with its combination of high-quality food, a clear proposition and a powerful and vibrant brand.
In January, Chilango set out to restructure its debts via a company voluntary arrangement.
Following the approval of this restructuring by its creditors and prior to the pandemic, Chilango traded strongly, on target with its forecast with like-for-like sales increase of 3%.
However, the measures put in place to combat the spread of Covid-19 halted Chilango’s encouraging recovery. Though Chilango sought to mitigate the impact of the pandemic, pivoting the business to focus on the delivery market and drawing on the government support measures available, this was insufficient to keep the business solvent.
In July, restructuring advisors RSM launched a formal sales process which received considerable interest and resulted in ten offers being made for the business and assets.
Managing Director Richard Franks, who took over running business in February 2020, will continue to lead Chilango with the full backing of RD Capital Partners (RDCP). He has twenty years of experience in the restaurant and hospitality sector and has led the business through this process, safely re-opening 6 restaurants and launching a new delivery kitchen during the pandemic.
Franks said, “Chilango is an incredible brand with quality food and an amazing team. Despite Covid-19, the team has put forth an outstanding effort to continue bringing our vibrant flavours to the UK. I’m grateful for the team’s commitment and resilience and the strong results from delivery speak to their hard work and determination, all of which was recognised by RD Capital Partners.”
Sameer Rizvi, CEO of RD Capital Partners (RDCP), said, “We are delighted to partner with a brand and business we have long admired. Chilango has a great proposition, which appeals to a diverse customer base, and we look forward to working with Richard and his team.”
Gordon Thomson, Joint Administrator, said, “Despite the commendable support provided by the Government, the pandemic and associated lockdown measures have presented significant challenges to the casual dining industry. This deal, together with the backing of RD Capital Partners, secures 130 jobs and will allow the Chilango brand to grow.”