Nightclub group Deltic warns landlords of 'closure' without sale

Thursday 19th November 2020 14:30 GMT

Sky News has seen a letter sent by the chief executive of Deltic Group, which owns the Oceana and Pryzm club brands, to property-owners seeking a rent-free period potentially lasting several months.

In the letter, sent on Thursday by Peter Marks, he told landlords that the rent-free agreement was essential because "no interested party is prepared to proceed and accrue a rental liability without the knowledge that long term occupation of the property can be secured".

He warned that "without a successful sale, the business will have no option but to be closed".

Deltic, which traded from 52 venues across the UK until the first UK-wide lockdown in March, has faced enforced closure of its sites for most of the year.

There remains little visibility on when it will reopen, despite the growing optimism about the availability of coronavirus vaccines.

"The management team of Deltic Group firmly believe that when they are allowed to open they will once again have a viable long term business," Mr Marks told landlords.

"In the interim any investor will have to fund substantial holding costs to maintain the staff and meet statutory obligation until the clubs can be reopened.

"Whilst bidders are willing to invest without clarity on an opening date, they require the support of the landlord group through the closure period."

The company is privately owned by its management team, led by Mr Marks, and a number of other individual shareholders.

Parties which have expressed an interest in acquiring Deltic include the private equity firm Greybull Capital, which has backed companies such as Monarch Airlines and British Steel.

BDO, the accountancy firm, is advising Deltic on the process and is expected to select a preferred bidder within days.

A Deltic spokeswoman said: ''The Deltic Group confirms it is in negotiation with a number of its landlords to extend their rent free periods as Deltic enters the final bid stage for the company.

"It has received a number of credible offers and will provide an update in due course.''

The Night Time Industries Association recently warned that 60% of the UK's nightclubs could face closure without further government support during the next two months.

Deltic itself has initiated a substantial number of redundancies in an attempt to cut its cost-base.

Revolution Bars Group, another operator of late-night venues, said last month that it was exploring options including a company voluntary arrangement to reduce the size of its estate.

Pub operators have also begun to initiate permanent closure programmes, resulting in substantial layoffs.

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