Coconut Tree enters CVA months after launching £1m fundraise

Sri Lankan restaurant group Coconut Tree has entered a Company Voluntary Arrangement (CVA), just six months after launching a £1m crowdfunding campaign.

Accountancy firm Forvis Mazars held a meeting of the group’s creditors on 13 June, where 100% voted in favour of the plans.

Details of how the CVA will work were not specified in Companies House documents, but creditors include HMRC, EON Energy and Swig Finance, which provides loans to small business.

CVAs are a way for insolvent companies to pay off their debts over a fixed period. If creditors agree to the plan, the company can continue trading.

Coconut Tree was founded by five Sri Lankan friends living in the UK and has grown from trading out of a pub in Cheltenham to running eight restaurants across the UK.

A Cardiff restaurant, which opened in 2019, is understood to have closed in recent months.

In 2023, the BBC reported that Coconut Tree had told 200 employees it could not pay their May wages due to “unforeseen costs to the business”, however the company apologised and later paid affected staff.

The CVA comes after Coconut Tree launched a £1m crowdfunding campaign in January, which it said could help it grow to 50 sites by the end of 2028.

The business said it was targeting a valuation of £100m by 2028 with an aim to grow annual revenue from £6.7m to £70m by 2028.

However, details of the crowdfunding on the Coconut Tree website now seem to have been taken down.