Focus: Burger King has been hit by the lockdown and its parent company has now been placed into receivership.
The parent company of Burger King in New Zealand has been placed into receivership.
Grant Graham and Brendon Gibson of KordaMentha were appointed receivers for the business, which operates 83 stores around the country and employs more than 2,600 staff.
In a letter addressed to staff, Burger King chief executive Michelle Alexander said that inability to earn revenue had created significant financial challenges for the company.
"As you know we have applied and received the Government wage subsidy, and this is assisting to pay all staff during the lockdown, however with no sales since lockdown commenced, the Company does not currently have the cash flow to fund trade creditors and rent payments," Alexander said.
She said there was a high degree of uncertainty to when the lockdown would end and how quickly the economy would recover.
In this context, she said that the Burger King shareholders had decided not to put any additional equity into the business.
While the company is listed under Tango and Antares in New Zealand, the overarching business is owned by US-based private-equity firm Blackstone.
Blackstone paid close to $108m in 2011 for the franchise, which was then made up of 75 restaurants. This has grown to 83 today.
Alexander explains that the aim of putting the business into receivership is restart the business and then find a new owner.
"We believe that this is the best way forward for the business and are committed to finding a new owner who is confident in the long-term prospects of the Burger King business in New Zealand," she said.
Alexander assured staff that these developments would not affect their terms of employment and that they would stay on at least 80 per cent of their usual earnings.
Burger King has operated in New Zealand since 1993, competing in a cluttered burger market occupied by the likes of McDonald's, Wendy's, Carls Jr, Burger Fuel and a number of other smaller firms.
