The Coconut Tree restaurant group has been sold out of administration to two of its original founders, safeguarding more than 150 jobs.
MPS Hospitality Limited—formed in April by co-founders Shamil Fernando and Praveen Thangiah—has acquired the business.
The Sri Lankan restaurant group entered a Company Voluntary Arrangement (CVA) last summer, only months after launching a £1m crowdfunding campaign aimed at supporting its expansion to 50 sites.
However, it was unable to meet its debt obligations and appointed administrators after defaulting on a £1.6m tax bill.
MPS Hospitality has acquired the company’s business and assets, enabling its restaurants to continue trading.
Administrator Forvis Mazars said the deal was “the best possible outcome for all creditors”.
Mark Boughey, joint administrator at Forvis Mazars, said: “The hospitality sector continues to face significant challenges, including rising costs, changing consumer behaviour and economic uncertainty, which have affected trading conditions for restaurant businesses. Against this backdrop we are pleased to have secured a positive outcome for employees and creditors of the Coconut Tree restaurant group.
“The agreement with MPS Hospitality Limited helps to protect more than 150 jobs. Throughout this process, we have prioritised preserving the business and supporting its workforce whilst achieving the best outcome for all classes of creditors.”
Founded in Cheltenham in 2016 by Fernando, Thangiah and three friends, Coconut Tree expanded from a pub operation to an eight-site group at its peak.
It now trades in Reading, Oxford, Cheltenham, Bournemouth, Bath and Bristol; its Cardiff site shut last year.
