Criniti empire sold off for pennies

The once great Criniti empire has sold its six remaining stores for a mere $1 million dollars, whilst its debts to creditors sit at $19 million.

It has been an ignominious end to this hugely popular restaurant chain 

The remaining six stores, including its NSW restaurants at Darling Harbour, Parramatta, Castle Hill and Kotara as well as Victorian sites at Carlton and Southbank, were picked up by

South Australian restaurant group Brunelli, which is owned by businessman Raj Patel.

Criniti’s financial problems began to appear in November last year when six locations entered voluntary administration. A seventh venue followed in January 2020.

Administrators were ready to sell the company in February to an undisclosed buyer for $6.1 million, however according to the Statutory Report to Creditors tendered to ASIC by liquidators Worrells, when the pandemic hit the deal was abandoned. 

“Interested parties were originally asked to make an indicative offer by close of business, 21 February 2020,” the documents stated.

“At the request of a number of interested parties, the date for submission of offers was extended to 6 March 2020. 

“We sought to enter a period of exclusive negotiation with a purchaser to agree to contract terms for a price of $6.1 million.

“The sale process was interrupted by the COVID-19 (coronavirus) pandemic, and the purchaser withdrew their offer.” 

Following that, the $1 million (including GST) bid made by Mr Patel was the “best offer” made for the once iconic chain.

The report also stated that the $1 million was divided between 14 separate Criniti companies, including the six stores, their respective holding companies as well as Crinz Media and Criniti Holdings. 

According to David Hobb, hospitality broker and owner of Prosperality, this was “beyond a fire sale” as some companies were sold for as little as $25,000.

“If a restaurant was 400 seats the revenue could easily be four to five million a year with an operating profit of $400,000 – $500,000,” he said. 

“At the very least they should be getting close to three quarters of a million, even in a bad climate.

“That is beyond a fire sale.” 

Mr Hobbs said the venues were for sold for a tiny percentage of what a moderately successful cafe would get today. 

As to whether the creditors will receive any of the their money back, that is yet to be determined.