Business Irish

Tuesday 23 January 2018

Musgrave steps in to bankroll Abrakebabra fast food group

Ray Kelly, marketing director of Musgrave Retail Partners, which owns SuperValu and Centra
Ray Kelly, marketing director of Musgrave Retail Partners, which owns SuperValu and Centra
John Mulligan

John Mulligan

Musgrave - the Cork-based retail group that controls the SuperValu and Centra chains - has stepped in to help bankroll Abrakebabra, taking a charge over assets belonging to the fast food group.

The agreement signed earlier this month brings Musgrave in as a lender to the Abrakebabra group, alongside existing backers, including a fund controlled by private equity giant Lone Star, and BlueBay Ireland.

The agreement also puts Musgrave near the top of the queue when it comes to debts being paid by the Abrakebabra group.

Apart from the Abrakebabra outlets, the food group also controls the franchise in Ireland for the Bagel Factory and O'Brien's. There are over 130 owned and franchised outlets in the group.

Musgrave declined to comment yesterday on its deal with Abrakebabra, which was founded by Graeme Beere.

Neither Mr Beere nor Abrakebabra managing director David Zebedee replied to queries about the deal with Musgrave, whose SuperValu business is the second-biggest grocery chain in Ireland after Dunnes Stores.

BlueBay became a lender to the Abrakebabra group in 2014.

BlueBay is a subsidiary of the Royal Bank of Canada, and is a €450m credit fund designed to provide loans to small and medium-sized businesses in Ireland.

The National Pension Reserve Fund has committed €200m to BlueBay.

The last set of accounts for Ronwell, a company connected to Abrakebabra, note that at the end of last April the group continued to undergo a "comprehensive business and financial restructuring and reorganisation and has the support of financiers".

Last year, it was reported that at least some of the loans connected to Abrakebabra which were bought by Lone Star as part of IBRC's liquidation appeared to have been refinanced.

It was assumed that Lone Star had provided the refinancing.

At the time, BlueBay also took a charge against assets belonging to the Abrakebabra group.

The decision by family-owned Musgrave to step into the funding breach is unusual, but not without precedent.

In 2010, Musgrave bought the trading business and premises of one of the country's busiest SuperValu stores, in Dublin's Churchtown, after its owner got into financial difficulties.

The owner, Jim Treacy, had spent £30m (then €38m) developing the Lough Erne golf resort in Co Fermanagh.

A receiver was appointed by Bank of Scotland to that development and to the Churchtown business, with Musgrave then buying it.

Mr Treacy has since regained full operating control of the SuperValu outlet.

Irish Independent

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