Exclusive – Rekom UK acquired out of administration for c£19.5m: The number of companies, which made up Rekom UK, the nightclub and bar operator, were acquired out of administration for circa £19.5m, which included the rolling over of circa £19m of debt owed to secured creditor Axiom. Propel revealed at the start of this month, that Rekom UK had completed a pre-pack administration, resulting in the closure of 17 venues, as it looks to focus on the growth of its strongest performing bar brands. The company’s remaining estate comprises 23 venues, including ten bars and 13 nightclubs. The company said its focus would now be on its strongest performing brands, including Heidi’s Bier Bar and Proud Mary, which continue to operate and have “outperformed expectations since opening”. A report from administrator Grant Thornton, shows that only one offer was received for the business, from a connected party. It shows that the purchaser paid £429,373 for the leasehold property interests, and £44,998 for the goodwill – brands and intellectual property. At the same time, fixed charge assets were paid via the rolling of the majority of Axiom’s indebtedness circa £19m to the purchaser. The residual balance owing to Axiom of circa £600,000 remains unpaid. The total consideration of the business stood at £19,513,906. The report stated: “Axiom, the secured creditor, of each of the companies was owed circa £19.6m (including interest and charges) on the date of appointment. Following the sale of certain business and assets to the purchaser on 1 February 2024, the joint administrators made fixed charge distributions totalling circa £19m, encompassing distributions from each of the companies. The sum of c.£600,000 remains outstanding in respect of certain unpaid interest and charges and it is currently anticipated that there will be insufficient funds to enable further distributions to Axiom.” On the background, which led to the administration, the report said that during the summer of 2022, trade for the business began to slow with nightclubs suffering more than bars. It said: “Whilst trade subsequently improved due to demand from incoming university students, the seasonal decline in trading performance was greater than anticipated. By February 2023, consumer spending declined and a new sector trading pattern had emerged. The group’s target customers were primarily young people aged between 18 and 25, who suffered the most from the rise in the cost of living resulting in a reduction in hospitality spending. Concurrently, the group was impacted by increasing energy costs, alcohol prices and wages inflation, all of which resulted in the group generating losses. The directors took action by cutting costs, including but not limited to making redundancies at its head office, reducing venue operating hours and commencing a disposal process for underperforming venues. Despite the success of the ‘party bars’, large nightclubs were loss-making and represent a significant proportion of the group’s portfolio. The group was therefore left with no alternative but to seek professional insolvency advice.” The business continues to be owned by the Nordic arm of Rekom, which is backed by Danish private equity firm CataCap and operates circa 150 sites across Denmark, Finland and Norway. The restructuring did not affect the Nordic arm of Rekom.