FRANKFURT (Reuters) - German restaurant chain Vapiano SE (VAO.DE) on Friday said it was insolvent and would apply for government assistance to avoid formally filing for insolvency, blaming the coronavirus crisis for a drop in sales.
“Due to the drastic decline in net sales and revenues, an insolvency reason in the form of cash flow insolvency for Vapiano SE has occurred as of today,” the company said.
Vapiano’s 55 German restaurants were closed yesterday evening, and almost all of the chain’s more than 230 outlets are now closed, the restaurant chain said in a regulatory statement.
Under German insolvency law, management has three weeks to evaluate whether full insolvency proceedings can still be averted.
“Vapiano will apply at short notice for support under the financial assistance programs announced by various governments in Europe,” it said.
Vapiano said it will pursue insolvency if such efforts to secure financial support fail since it generates almost no turnover, while salaries, rents and operating costs continue to accrue. It expects a decline in sales of over 20%, and a fall in operating and net profit in the first and second quarters of 2020, it said.
(This story corrects to clarify company has not yet formally filed for insolvency)
Reporting by Edward Taylor, editing by Thomas Escritt