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Wagamama expects £5.5m monthly cash burn in lockdown

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Lucy Harley-McKeown
·2-min read
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Wagamama restaurant seen in central London near the Tate Modern. Photo: Petra Figueroa/SOPA/LightRocket via Getty Images
Wagamama restaurant seen in central London near the Tate Modern. Photo: Petra Figueroa/SOPA/LightRocket via Getty Images

Pan-Asian restaurant chain Wagamama has said that it expects to burn through £5.5m ($7.7m) every four weeks during the current coronavirus lockdowns.

As a result its parent company, The Restaurant Group (RTN.L), said it has secured a new £500m lifeline in order to stay afloat as the UK edges closer to definitively opening up again.

The Group, which also owns Frankie & Benny’s, Chiquito, and dozens of pubs, said £380m of the new long-term loans, alongside a drawing of the revolving credit facility, would be used to repay and refinance all of the company’s existing debt facilities, including the government’s coronavirus large business interruption loan scheme (CLBILS).

It also said recent trading had been "strong" across the approximate 200 sites currently open for delivery.

The Restaurant Group shares bounced more than 9% in early trade in London following the news.

The Restaurant Group edged more than 9% higher in early trade in London. Chart: Yahoo Finance
The Restaurant Group edged more than 9% higher in early trade in London. Chart: Yahoo Finance

The chain has an accelerated reopening plan for dine-in trading, once the current restrictions for hospitality businesses end, with all viable sites being reopened within two weeks.

READ MORE: £5bn UK high street COVID recovery fund in store in budget

Over the weekend, news eked out about a potential £5bn recovery fund for the British high street in chancellor Rishi Sunak's spring budget on Wednesday.

This could be a much-needed lifeline for many restaurants, pubs and shops. The chancellor said the grants are intended to support shops and pubs as COVID-19 lockdowns ease in England and are worth up to £18,000.

At the tail-end of last year, the Restaurant Group said it had lost £62.6m in the first half, but trading since the summer had been “very encouraging.” It had made a £28.1m profit in the six months to the end of June last year.

Watch: What to expect in the chancellor's budget 2021