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The UK’s largest nightclub operator, Deltic Group, is on the brink of administration as it battles to secure a rescue deal.
The group, which employs just under 1,500 people and runs 52 bars and nightclubs, including the ATIK, PRYZM, eden and Bar&Beyond chains, has been seeking new investment since October after months of enforced closures under government measures to control the coronavirus pandemic.
But Deltic has now filed a notice of intention to appoint administrators, a legal measure which provides protection from creditors for ten working days.
Scandinavian firm REKOM, which runs over 100 bars and nightclubs across Denmark, Norway and Finland, and Greybull Capital, a private equity firm which has previously backed ailing companies including Monarch Airlines and British Steel, are both in the running to buy out Deltic but any deal is expected to involve administration.
UK Covid-19 restrictions: the key political dates ahead
The current lockdown in England ends, and the new strengthened tier system comes into force with nearly 99% of England headed for the strictest two tiers. Only the Isle of Wight, Cornwall and the Isles of Scilly are set to go into tier 1, with more than 32 million people in tier 2 and more than 23 million in the toughest tier 3.
New restriction come into force in Wales. Pubs, restaurants and cafes will be banned from serving alcohol, and will be unable to open to customers beyond 6pm. Businesses can offer a takeaway service after 6pm, and if they have an off-licence can sell takeaway alcohol up until 10pm. Bingo halls, bowling alleys, soft play centres, casinos, skating rinks and amusement arcades will also have to close.
The rule allowing four people from four different households to meet indoors in pubs and restaurants will stay in place. The decision will be reviewed on 17 December.
Ministers will consider data about England’s coronavirus cases weekly throughout the tiers period, while legislation requires a formal review of tiering allocations every fortnight. The first review point is 16 December, with new tier allocations announced the following day – decided by a cabinet committee chaired by the prime minister. They will come into effect on Saturday 19 December, Boris Johnson said.
For five days over Christmas there will be a UK-wide relaxation of rules to let up to three households form a ‘bubble’ so they can mix socially indoors and stay overnight to enjoy the festive period together. In Scotland, a maximum of eight people will be allowed but that does not include under-12s. In Northern Ireland, the window has been extended to 22-28 December to allow for additional travel time between countries.
Johnson has announced a “sunset” clause on the tiered restrictions in England, meaning they will expire on 3 February and require MPs’ approval if they are to be extended into March.
Deltic’s chief executive, Peter Marks, who founded the group in 2011 by purchasing the collapsed Luminar nightclub business with the support of several private investors, has been a vocal critic of government policy on nightclubs which have been unable to fully operate since March.
He has said the government’s failure to offer more support had “slowly choked us to death”.
In an effort to survive, Deltic has already cut 1,000 jobs and repurposed parts of its clubs as bars.
But in October Marks said the company was burning through £1m a month and faced running out of cash by the end of this year.
The Night Time Industries Association (NTIA) trade body has warned that, without the required financial support, three-quarters of night-time economy businesses now face permanent closure. It says that the government-backed furlough scheme and grants of up to £3,000 a month are not enough to keep afloat large clubs whose costs far outstrip those payments.
Clubs including Egg London and Glasgow’s Sub Club have launched crowdfunding campaigns in a bid to stay afloat.
Michael Kill, the chief executive of the NTIA said: “Deltic is a key example of a business that has been stolen from Peter [Marks] by the restrictions. It is not down to him or the viability of the business it is down to the restrictions and not being supported in a proportionate manner to allow him to survive.”
Source: The Guardian
Keyword: UK nightclub operator Deltic Group on brink of bankruptcy | Hospitality industry