Burrito chain Chilango set for administration

Fri, 24 Jul 2020 | ADMINISTRATION

Burrito chain Chilango has given notice of its intention to appoint administrators, putting the money of small investors in its “burrito bonds” scheme at risk. The chain, which has 12 sites, is working with restructuring agents RSM to pursue a sale. A source has said that a pre-pack sale is expected within two to five weeks.

Over 1,000 investors bought mini-bonds worth £5.8 million in two fundraising efforts by the restaurant chain. The scheme promised investors returns of 8 per cent a year, but the company warned investors in December that it was in need of rescue restructuring and entered a CVA.

The company said that the vast majority of bondholders had opted not to preserve their principal investment or rate of return in a new preference share class at the time of the CVA. Chilango then paused this conversion.

If the chain does enter administration, bondholders may be reliant on recouping some of their money from the sale of Chilango’s assets, which the company warned last year could lead to a 99 per cent loss on their investment.

Chilango said that following its restructuring it had returned to positive trading and was on track to deliver budgeted group EBITDA of more than £800,000. However, the company says that, like many other restaurant chains, it had then been hit hard by the COVID-19 lockdown.

In a letter to shareholders, the company said: “No business could have foreseen the impact the coronavirus crisis would have on our industry, with few sectors being hit harder by the pandemic than hospitality.”

“During this period we have done our very best to mitigate the pandemic’s impact, operating as much as is safely possible while implementing the various government support measures available. Unfortunately, these efforts have not been sufficient to secure the future of our business.”

Find businesses for sale here.

If you are looking for an exit, we can help!

Share this article

Latest Businesses for Sale

High-Street & Online Butcher
Scotland, UK

Award-winning retail & wholesale butcher offering a wide range of meat products handmade at its large production facility selling to a loyal local customer base from its high-street shop & online. Offers invited.

Asking Price: Offers Invited
Turnover: £1,993,000

Northamptonshire, UK Wide

This long-established business of over 50 years has built up an enviable reputation within this sector of the market for quality and customer service and is award winning and which due to retirement this rare and exciting opportunity has now become a...

Asking Price: £535,000
Turnover: £1,569,695


Atherstone, Warwickshire, UK Wide

A well established business with an enviable reputation and many existing customers. Prime trading position in the centre of town. All fixtures and fittings included making this a real Turnkey business opportunity. Ideal owner managed or partnership...

Asking Price: £749,995
Turnover: £514,000


View more businesses for sale

News Search

Latest News


Wrexham-based wire firm falls into administration | ADMINISTRATION

Wire manufacturer Wrexham Wire has fallen into administratio...


Leading UK tour operator Ski Weekends enters administration | ADMINISTRATION

One of the UK’s leading ski tour operators Harris Holi...


Pizza Express puts itself up for sale and looks to close 67 outlets | BUSINESS SALE

Pizza Express has announced that it is seeking a buyer for i...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide


Related News


Aldo UK falls into administration | ADMINISTRATION

Footwear retailer Aldo UK has entered into administration du...


Sigma Dynamics purchases Manchester software business out of administration | BUSINESS SALE

Sigma Dynamics has acquired the Dynamics 365 Finance and Ope...


Scale manufacturer taken over in MBO | MBO/MBI

Weighing scale manufacturer Marsden Weighing Group has been ...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources