The Coconut Tree, a Sri Lankan restaurant group operating across the UK, has reportedly entered into a company voluntary arrangement (CVA) [an arrangement in which it is agreed that unmanageable company debts can be paid back over some time, typically 3-5 years, while a business can continue subject to the agreement of its creditors].
The move comes only six months after The Coconut Tree initiated a £1m ($1.2m) crowdfunding campaign.
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The CVA was agreed upon unanimously by creditors at a meeting facilitated by international professional services company Forvis Mazars on 13 June 2024, The Caterer has reported.
The specifics of the CVA’s implementation remain undisclosed in the Companies House filings.
The company’s UK creditors include UK HM Revenue and Customs, EON Energy and Swig Finance, a company known for providing loans to small businesses.
CVAs typically allow insolvent companies to settle their debts over a set period, permitting them to continue operations if creditors assent to the arrangement.
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By GlobalDataCoconut Tree, established by five Sri Lankan friends in the UK, has expanded from a single pub in Cheltenham to a chain of eight restaurants.
It currently operates nine restaurants in the UK, in Bath, Birmingham, Bournemouth, Bristol, Cardiff, Cheltenham and Reading.
The Cardiff location, which opened in 2019, shut down in the spring of 2024.
In June 2023, the BBC reported that Coconut Tree had disclosed to its 200 employees the inability to disburse their May salaries due to “unforeseen costs to the business.”
The chain subsequently apologised and paid the affected staff.
The company cited “increased cost of goods” as a reason for the struggle to pay May’s wages.
In January 2024, the company launched a £1m crowdfunding campaign, which it claimed would enable expansion to 50 sites by 2028.
The company also targeted a valuation of £100m, with projected annual revenue growth from £6.7m to £70m.
The crowdfunding details have since been removed from the Coconut Tree website.
