Graphite Capital, the UK private equity firm, has dropped plans to float or sell Wagamama, the UK noodle restaurant, in favour of a re-capitalisation of its investment. Graphite will return £34m (€50m), or five times its investment, to shareholders.

Andy Gray, a partner at Graphite, said the firm considered floating Wagamama, which is famous for its wooden benches and no-reservations system, as well as selling it to other private equity investors. Gray said: "Given the favourable credit terms available, the best option was for us to return some cash to investors but keep hold of the majority of the equity in a growing business."