Blackstone-owned Burger King NZ enters receivership

Corporate filings indicate that KordaMentha has been appointed as receiver for three entities – Antares New Zealand Holdings, Tango New Zealand, and Tango Finance – that are said to be the shareholding entities for the business. The operating company continues to trade, but all 83 restaurants are currently closed under national coronavirus lockdown measures.

“The ultimate aim of the receivership is to get the business restarted post-lockdown and then transition the business to a new owner through a sales process," KordaMentha said in a statement cited by local media. To this end, it is seeking support from suppliers and landlords.

Michelle Alexander, CEO of Burger King New Zealand, said in a letter to staff that, although the company is receiving government subsidies so it could continue paying salaries, there is no cash flow to honor agreements with trade creditors and cover rental expenses. Due to uncertainty as to when the lockdown would end and how quickly it would take for trading to recover, shareholders had decided against putting more equity into the business.

Burger King arrived in New Zealand in 1993 but the company encountered difficulties long before COVID-19. It was acquired by Anchorage Capital Partners for NZ$46 million in 2009 as a turnaround investment. Six new restaurants were opened – taking the total to 75 – existing outlets were refurbished, and the management team was strengthened. The business, by this point known as Antares Restaurant Group, was then sold to Blackstone.

However, Burger King still trails its competitors by market share. According to research firm Roy Morgan, McDonald’s led the way with 33.2% in 2018, followed by KFC on 17.7%, Domino’s Pizza on 15%, and Burger King on 14.9%. Blackstone reportedly launched a sale process for the business in March of last year.

It is the second private equity-owned consumer business in Australia and New Zealand to enter receivership in recent weeks. Administrators were brought in to oversee swimwear brand Tigerlily – held by Crescent Capital Partners since 2017 – following a collapse in sales attributed to the COVID-19 outbreak. However, stresses were apparent in the business before the crisis emerged.

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• Topics
• Australasia
• Consumer
• Write-off
• New Zealand
• The Blackstone Group