“They've managed to get the tender away. It is true there was not enough cash at the Vivion level and Amir Dayan had to give up some of Golden’s cash pile to keep control of Vivion,” independent special situations firm Sarria said. “Cash is king these days and this will cost him access to some future opportunities, but it’s an obvious choice.”

Sarria noted that Vivion can deal with the 2024 stub through raising debt on unencumbered hotels, or by selling hotels, one of the few asset classes currently worth anything in the UK. Sarria argued Vivion have got half a chance there and raiding Golden again is now more of a fallback option. 

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“We are still talking about the UK’s number two pizza chain and if this is the nadir of the affordability crisis, then the capital expenditure and inflation might allow for sales growth of 10% per annum now. To then refi in two years they’d also need to produce a margin uplift of 5%,” independent special situations firm Sarria said.

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Independent special situations firm Sarria are cautious on Boparan. While Sarria remain relatively unconcerned on the competitive threats they noted that labour and electricity costs are increasing and that non-food cost inflation is not covered under existing pass-through arrangements. Additionally, the 2025 bond maturity is not so far away.

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“It’s a recognition of the fact that you need the family onboard to fix future problems because they know the company and control its surroundings,” said Wolfgang Felix, co-founder of independent credit analysis firm Sarria,

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“It’s probably just a matter of catching a falling spoon,” independent special situations firm Sarria said. “But the spoon has two explosives attached, which we are very mindful of.”

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“They had significant write-downs on their Italian joint venture recently. CarVal’s sale of their stake, effectively resulted in a 90% write-down of the Italian SPV based on underlying assets,” independent special situations firm Sarria said. “This is an astonishing number and clearly far too much to apply across the back-book. But a number of questions linger from that episode.”

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Current trading is not much of a concern yet, Sarria noted. Cash is weaker than expected and some of it will be down to an outflow of payables, but pre-funding inventory is the big concern, even with Matalan’s cash balance.

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They have good liquidity and decent assets with rent linked to CPI, independent special situations firm Sarria noted. “Raising rent can of course lead to vacancies, but that’s where it pays to hold attractive assets,” Sarria told Debtwire. “On the UK hotel portfolio, after the Queen’s funeral has been televised across the world, I assume the next ten years of UK tourism are safe.”

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