Tue 3rd Jun 2014 - Breaking News - Tragus looks to shed 50 sites and sell Strada in restructure Tragus looks to shed 50 sites and sell Strada in restructure: Tragus, the owner of the Café Rouge and Strada chains, is preparing a financial restructuring that will reduce debt and off-load its tail. The restructure would see around 50 sites subject to potential closure. The company would be left with around 200 sites and debt reduce from £262m to £90m. The company plans to invest £110m in the business over the next four years. Tragus Group is looking to launch company voluntary arrangements (CVAs) that would enable it to restructure some of its rent obligations at Café Rouge and Bella Italia. It is also poised to launch a sale process for Strada, the premium Italian chain which operates 59 sites. A Tragus spokesman told Propel: “The heart of the matter is Tragus had a hugely overleveraged balance sheet which has stopped investment and innovation in the brands and the group has seen profit decline over the last five years caused by a clearly defined and significant non core tail. Having said that the brands remain well-loved by customers and remain very popular and profitable, the restructure is about creating the right platform and conditions for them to grow again. To this end early trials of a new Bella and Café Rouge format have proved to be very successful and it is the intention to aggressively refresh and expand both brands. The slimmed down group will be focused on investing and growing its two brands (Bella and Rouge) substantially over the next few years. The balance sheet will be exceptionally strong (2.5 x debt to Ebitda) and the business will have access to substantial funding to grow £110m capex over four years.” Tragus was formerly owned by Blackstone, the American private equity firm, but was taken over earlier this year by lenders led by Apollo Management. Its performance under its previous owners, Legal & General Ventures and ECI, were in contrast to Blackstone’s period of ownership, with both making substantial sums from their ownership of the business. Blackstone paid £267m for Tragus in December 2006, using about £167m of debt to fund the deal. Legal & General Ventures, had bought Tragus two years earlier for £90m from the private equity firm ECI, which had purchased it from Whitbread in 2002, for £25m. Tragus Group saw operating profits for the 53 weeks to 2 June 2013 fall 12.9% to £34.59m from £39.71m in the 52 weeks to 27 May 2012. The group recorded a loss of £33.72m for the year, up from £19.32m in 2012. Net debt rose to £324.58m from £314.97m the previous year. Turnover was up 3% to £294.82m from £286.27m in the 12 months to 27 May 2012.