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Vapiano Sells German, French Operations

By Jonathan Braude

Vapiano SE, a bankrupt German restaurant chain, has agreed to sell its main German business to a consortium led by its former international franchising chief Mario C. Bauer in a deal that will also include its majority stake in an Australian joint venture with Three Wise Men Pty. Ltd.

Ruth Rigol, the court appointed insolvency administrator and liquidator for the Italian-themed chain said in a filing on Tuesday, June 2, that the sale included 30 restaurants operated by Vapiano in Germany and that Bauer’s consortium will pay €15 million ($16.8 million) for a mixture of assets and shares.

“In addition, the national and international franchise business and the associated franchise companies as well as the shares in the joint ventures in Münster/Osnabrück, Bielefeld, Ulm and Australia are being sold,” the liquidator said.

Rigol, a partner at the specialist insolvency and restructuring law firm Pluta Rechtsanwalts GmbH, did not immediately reply to a request for clarification on whether the above would be separately priced.

The deal follows a separate agreement in principle to sell the French and Luxembourg business to Bauer. The consortium submitted a revised irrevocable offer of €25 million, up from its previous bid of €22 million, which the liquidator’s statement said was expected to be accepted in the next few days. The original offer had been accepted by the Vapiano creditor committee, but its banking consortium pressed for more.

Together with the French and Luxembourg offer, the Bauer consortium also proposed to enter into a long-term franchise agreement with Vapiano Franchising International GmbH which would form the basis for a joint market presence in future.

Bauer was CEO of the franchising business from June 2011 until December 2016, according to Boardex, a relationship mapping sister company of The Deal. Vapiano listed in Frankfurt in June 2017, and Bauer retained a role as head of expansion, partnerships and new markets and later as an adviser to the company until the end of 2018.

Vapiano had operations in 33 countries and more than 80 outlets in Germany of which 55 were operated by the company and the remainder by franchisees and joint venture operators. The liquidator’s statement said other assets and operations not included in disposal agreements so far were still up for sale.

Rigol’s appointment was formalized on June 1, after the District Court of Cologne officially opened insolvency proceedings. But the process goes back to March 20, when Vapiano said it had become cash insolvent following the closure of most of its 233 restaurants around the globe amid the coronavirus pandemic and that it would not be able to survive without government support.

Vapiano has debt of €441 million of debt, according to S&P Global Market Intelligence.

It officially filed an application for the opening of insolvency proceedings on April 1, and appointed a preliminary insolvency administrator, after failing to reach an agreement with its creditors and major shareholders. Vapiano said that without their agreement on contributions to rescue financing, it could not apply to the government for funding. It said at the time its liquidity requirements had increased by €36.7 million as a result of the coronavirus crisis. At that point it appointed a preliminary administrator.

The creditors and shareholders’ reluctance to contribute came despite their previous agreement on the key principles of a pre-pandemic financing plan to cover liquidity needs of €10.7 million while it went through a turnaround plan. The plan involved the sale to an unnamed restructuring expert and trustee by Hamburg-based private equity investor Mayfair Vermögensverwaltung SE of its 47% stake in the company, as well as a covenant reset from its banks.

On April 30, the company said it had decided to commence a formal sales process for the German and worldwide business. Discussions with potential investors in the French and Luxembourg business, which was not in insolvency proceedings, were already at an advanced stage.

Vapiano’s supervisory board chair, Vanessa Hall, her deputy Hinrich Stahl and other supervisory board members resigned Wednesday, and will leave on June 30.

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