The group that owns the franchise operator of Burger King restaurants has been placed in receivership by its financiers.

Do you know anything? Email: melanie.carroll@stuff.co.nz

The New Zealand Burger King restaurants had taken a significant hit during the coronavirus lockdown, said Brendon Gibson of KordaMentha, who along with Grant Graham was appointed receiver on Tuesday.

The aim was to get the business restarted post-lockdown, and then sell it.

Burger King first opened in New Zealand in 1993, and has 83 restaurants with over 2600 staff.

READ MORE:

* Coronavirus: Amazon hires another 75000 staff to cope with Covid-19 demand

* Coronavirus: Urbis, Interior magazines to close

* Coronavirus: Treasury models paint dire economic picture, mass unemployment

ROBERT KITCHIN/STUFF Burger King's franchise owner is in receivership.

In a letter to staff, Burger King NZ chief executive Michelle Alexander said the company did not have the cash flow to fund trade creditors and rent payments.

"When the business is restarted, it will take time for us to reach our pre-lockdown trading levels and there is uncertainty as to when the lockdown will end and how quickly trading will recover.

"Our shareholders have advised that they will not be putting any further equity into the business. As a result, Tango New Zealand Ltd, has been placed into receivership with KordaMentha."

To get the business restarted after the end of the lockdown, it needed the support of creditors, landlords, head franchisor Burger King Asia Pacific, and its financiers, a group of New Zealand-based banks, said Gibson.

"It's the only way this business will be able to survive, if we can get this plan away, so we're going to give it, and management are committed to giving it, their best shot - communicating with creditors, landlords, it's a difficult situation but these are are unprecedented times.

"Hopefully we'll get some co-operation out of landlords and creditors, and the aim is in 12 months time there'll be a new owner and this will be forgotten and Burger King will be operating in New Zealand," he said.

The parent shareholding companies in receivership were Tango Finance Limited, Tango New Zealand Limited and Antares New Zealand Holdings Limited.

While that parent company was in receivership, the operator of Burger King, called Antares Restaurant Group, was not, Gibson said. However, there was the potential that some sites may close.

"The business has had difficulty. Why we're in this position now, there's no doubt the impact of Covid-19 has been pretty stark for this business - it's been closed for a month now, and we're now focused on getting this business restarted."

The Government wage subsidy had helped keep staff paid during the lockdown, he said.

Antares had received $11.5 million in wage subsidies for 1918 staff. The company said in March that it was committed to paying staff at least 80 per cent of their earnings.

The aim was to keep open a "critical mass" of restaurants, and Burger King Asia Pacific was keen to keep the Burger King brand operating in New Zealand, under new ownership.

A trigger for the receivership was the company's level of debt once the cashflow was turned off, Gibson said.

"The [banks] are supporting this process in terms of continuing to provide facilities to the business to allow it to restart.

"It's been a pretty tight timeframe - this all blew up only two-and-a-half weeks ago."

Antares was bought in 2011 by United States private equity firm Blackstone Group, which manages over US$500 billion worth of assets.

Unite Union said the lockdown might have triggered the receivership, but the responsibility ultimately rested with Blackstone.

"Long serving employees all tell the same story - there was a noticeable change when Blackstone took over," said Unite national secretary Gerard Hehir.

"They simply were not interested in building the business and investment - it was all about squeezing cash from the business. Now they are just going to walk away, leaving employees, banks and suppliers to suffer the consequences.

"If there are job losses and business failures then, of course, taxpayers will be also have to pay as well."

Hehir said the problem was not that the business owner could not pay the bills.

"The true owner, according to this Forbes article, is actually flush with almost $200 billion of capital and well positioned to dramatically increase their wealth amongst the current Covid19 economic chaos."

Fast food businesses tended to bounce back after a downturn, Hehir said, and in this case takeaway and drive-through food companies were potentially more able to met prolonged social distancing rules than other food suppliers.

"KFC, Pizza Hut, McDonalds and Wendys are in exactly the same market situation as Burger King. The difference is those companies have a mostly New Zealand based ownership that is committed long term to their businesses, not just grabbing cash and running."