Four Star gets new investor as rescue set to save 435 pizza jobs
MORE than 400 jobs looked set to be saved after embattled pizza chain Four Star secured a new investor and got the nod from creditors for a rescue deal.
The news comes three months after Four Star went into examinership, a court-led process that gives struggling businesses temporary protection from their creditors while a restructuring deal can be worked out.
Four Star Pizza's examiner, Neil Hughes, of accountancy firm Hughes Blake, is to give the High Court details of the chain's rescue this morning.
The Irish Independent has learnt that a new investor has come forward and is hoping to keep all 40 Four Star outlets open and all 435 jobs across the pizza chain's franchises and head office.
The plan also provides for a settlement with trade creditors, the Revenue Commissioners and National Irish Bank, which is owed €4.9m.
The rescue was put to Four Star's creditors yesterday and is understood to have received the thumbs-up, even though trade creditors will get very small payments.
A spokesman for National Irish Bank said the lender had "no comment" to make, while Mr Hughes failed to return calls.
The business rescue deal must also be approved by the court, which has overruled creditors' votes on examinership deals only on very rare occasions.
The court will be given full details of terms being offered to creditors and will also be given details of the new investor.
The master franchise for Four Star is owned by former BDO Xavier Simpson executives Anthuan Xavier and Jason Sheehy.
Their level of ownership in the 'new' Four Star is unclear, but Mr Xavier has previously stated that he "would like to stay involved in some capacity".
Four Star first approached the court for examinership protection back in mid November, citing onerous lease costs that put a strain on franchise-holders, coupled with a 30pc fall in like-for-like sales over the last three years amid fierce rival competition and heavy discounting.
The group had been hoping to open six new outlets in 2010 but abandoned these plans due to lack of financing -- the new owner may revive those expansion moves.
Examinership has been increasingly called on over the recession as otherwise viable businesses stumble under a combination of high fixed costs and high borrowings.
The structure has been successfully used to restructure firms such as fitness chain Jackie Skelley, which rebranded as 'energie' after attracting a new investor.
Several companies that have emerged from examinership in a "healthy" state have gone on to run aground again, triggering criticism that the bar is set too low for firms to be rescued.
The Lynch Hotel group emerged successfully from examinership in November 2009, but two of the group's properties were recently taken over by receivers acting for a lender.