U.K. Car Park Operator NCP Seeks Restructuring to Cut Rents

(Bloomberg) --

National Car Parks Ltd., the U.K.’s largest parking operator, is seeking to cut its rental costs in a court process after demand for parking facilities plunged during the pandemic.

The company failed to reach a consensual deal with property owners, but received “significant support” and estimates that at least 85% of its A1 landlords will back the proposal, according to a company statement. The first hearing on the restructuring plan --a U.K. court process introduced last year and available to struggling firms looking to reduce their liabilities even without support from a majority of creditors-- is due on May 28.

The overhaul is necessary to avoid insolvency as NCP tries to recover from the pandemic. Shareholder Park24 Co., Ltd. flagged it will stop funding the business if the restructuring fails, according to a letter it sent to the operator.

Under the plan, management will remain in place while implementing structural reforms, rebasing rents and exiting unprofitable parking facilities. NCP has already cut its workforce and taken advantage of government support schemes, it said in the emailed statement.

NCP’s revenues fell about 80% below normal levels during full lockdowns. Many high streets and train stations are unlikely to ever recover their pre-pandemic footfall due to the combination of increased flexible working and the rapid growth of online commerce, it said.

U.K. companies struggling to keep up with their leases are increasingly looking to use restructuring plans to curb costs. A London court is expected to rule on a similar plan brought by gym operator Virgin Active next week, the first of its kind.

Read more: Virgin Active in Court Clash With Landlords Over Rent Plan

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