Cote restaurant's owner cooks up fresh capital injection

The owner of the Cote restaurant chain is exploring the option of injecting new funding into the business and retaining control after two months of talks with potential buyers.

Sky News has learnt that Partners Group, the Swiss-based private equity firm, is seriously considering providing millions of pounds of new capital to finance a turnaround plan which would be likely to involve the closure of loss-making sites. Partners Group hired Interpath Advisory during the summer to sound out prospective bidders.

A number of those discussions are said to be ongoing. Cote was bought out of administration by Partners Group in the autumn of 2020 in a deal reportedly worth £55m.

The chain trades from about 70 restaurants, down from close to 100 shortly before it collapsed into insolvency five years ago. Sources close to the sale process said that Interpath had been marketing the company based on last year's turnover of over £150m.

Roughly 60 of the sites are said to be profitable, implying there could be scope for further closures. The sale process comes at a time when hospitality venue operators continue to face severe financial pressures, with the industry's leading trade body recently warning of a further jobs bloodbath in the months ahead.

"If we carry on with these trends and the situation doesn't improve - and clearly Rachel Reeves's statements are giving a signal to consumers that it is not going to get better any time soon - then I would see this accelerating," said Kate Nicholls, chair of UK Hospitality. "Unless there is a change of tack by the government, we are looking at 150,000-200,000 fewer workers in hospitality during the first full year of [employer national insurance contribution] changes." Partners Group and Interpath declined to comment..