The parent company of Burger King in New Zealand has been placed into receivership.
Grant Graham and Brendon Gibson of Korda Mentha were appointed receivers for the business, which operates 83 stores around the country and employs more than 2,600 staff.
Burger King restaurants have been closed as part of the level four lockdown in response to the Covid-19 pandemic.
Brendan Gibson said this has had a significant impact on the business in New Zealand. The receivers will now seek support from suppliers and landlords to possibly restart the business once the lockdown is lifted.
Gibson said the senior management team remains committed to the business and is working on a plan to reopen after the lockdown.
Established in New Zealand in 1993, the Burger King shareholding companies in receivership are Tango Finance Limited, Tango New Zealand Limited and Antares New Zealand Holdings Limited. In a letter to staff, Burger King chief executive Michelle Alexander said that inability to earn revenue had created significant financial challenges for the company.
The company has applied for and received the Government wage subsidy “however with no sales during the lockdown the company does not currently have the cash flow to fund trade creditors and rent payments.”
While the company is listed under Tango and Antares in New Zealand the overarching business is owned by US based private equity firm, Blackstone, who paid $108 million for the franchise in 2011. Alexander said the aim of putting the business into receivership was to restart it and then find a new owner. In March 2019 Blackstone appointed Craigs Investment Partners to find a buyer for the business. By the time COVID-19 hit a buyer had not been found.
Alexander assured staff that these developments would not affect their terms of employment and that they would remain on at least 80 percent of their usual earnings.
“We believe that this is the best way forward for the business and are committed to finding a new owner who is confident in the long term prospects of Burger King in New Zealand,” said Alexander.