The Next Has-Beans?

Mexican Burrito chain Chilango is the latest restaurant to enter into a company voluntary arrangement (CVA) in an attempt to avoid administration.

After reporting a £1.4m loss for the year upto March 2018, reports for 2019 suggest a £6.9m loss and unsustainable debt, with the company never having turned a profit since its launch in 2007.

The London company, which boasts 12 branches including Manchester Oxford Road next to the Palace Theatre, is said to be considering closing some of its restaurants with the CVA allowing them to re-open rent negotiations with landlords.

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Despite the company declaring in April 2019 - to potential investors in their "Burrito bonds" crowd-funding scheme - that 100% of its restaurants were profitable and bond holders would receive 8% returns twice a year, the same small investors were informed in December that they could lose 90% of their money if the CVA was not agreed – or 99% if the company goes into administration.

With the CVA now agreed, these small investors who ploughed £5.8m into Chilango, are set to have their investments converted into shares, as the struggling chain fights to stay afloat. They have now been promised returns "sometime in the future" provided the company can sort out its finances.

Launched by former Skype employees Eric Partaker and Dan Houghton in London in 2007, the two have agreed to step down as co-CEOs after pressure from investors.