Japanese-style noodle bar chain Wagamama moved a step closer to Brighton after agreeing a £63 million refinancing package.

The chain now has enough funds to pay for its expansion plans following the deal, which includes cash injections from private investors.

Founded in 1992, Wagamama, which is controlled by Graphite Capital, has built a network of 25 restaurants in the UK and eight overseas franchises from Sydney to Dubai.

New openings are planned in the UK, including branches at airports, railway stations and the Argus Lofts development in Brighton.

In addition to rolling out more of its overseas franchises, Wagamama has set its sights on cracking the North American market.

Plans to float Wagamama on the Alternative Investment Market were put on hold in June after Graphite received approaches from venture capital firms. Graphite considered a trade sale and held detailed talks with private equity group Apax Partners before pulling out of a potential deal at the last minute.

The refinancing package unveiled yesterday involves Graphite lowering its interest in Wagamama from 87 per cent to 70 per cent. Specialist finance boutique Hutton Collins has made a cash injection of £17 million for a 12 per cent stake and the Royal Bank of Scotland has provided £47 million in new banking facilities.

Wagamama chief executive Ian Neill and two other executives, who stood to receive a sizeable windfall had the company been sold, have increased their stake slightly to 15 per cent.

Mr Neill said: "We have proved the Wagamama concept works and we have a coherent strategy for growth."

Wagamama's style is modelled on noodle shops in Japan where customers sit side by side on wooden benches in large open-plan restaurants.

The group has taken out a lease on a two-storey site in the Argus Lofts development.

A spokesman for the company yesterday confirmed it intended to move into the premises in the middle of November. The opening was delayed in the spring due to "technical difficulties" with the lease.

Wagamama, which has restaurants in London, Manchester, Bristol and Glasgow, is the biggest name to show an interest in the development.

Trendy inner-city flats developer City Lofts has invested £18.5 million in renovating the former Evening Argus building in North Road.

Tuesday September 07, 2004