Conviviality Boss Steps Aside Amid Cash Call For Surprise Tax Bill

19th Mar 2018 12:58

LONDON (Alliance News) - Conviviality PLC said Monday that Chief Executive Officer Diana Hunter has stepped down from the troubled alcohol wholesaler as it continues to deal with the hangover from its unexpected GBP30 million UK tax bill.

Hunter - who has been at the helm since 2013 - will be replaced by Non-Executive Chairman David Adams, who will become executive chairman until "further notice", Conviviality explained. Hunter will, however, remain at the firm for a period of time to provide "transition support".

"The company is continuing to engage with stakeholders as set out in the announcement of Friday 16 March and will provide a further update in due course," Conviviality added.

The news comes after Conviviality said on Friday it was considering the "possibility of an equity fundraise to effect a recapitalisation of the business" as it deals with an overlooked GBP30 million bill from HM Revenue & Customs to pay by March 29.

This followed Conviviality cancelling its proposed 4.50 pence interim dividend last Wednesday - keeping GBP8.2 million in cash on its balance sheet - in order to help it resolve its short-term funding requirement. The dividend was due to be paid last Friday.

The UK tax bill prompted Conviviality to say it expected adjusted Ebitda to be in the range of GBP55.3 million and GBP56.4 million last Tuesday. This is compared to market expectations prior to the news of between GBP69.1 million and GBP70.5 million.

On Friday, there were media reports Hunter was set to lose her job at the Bargain Booze and Wine rack-owner in return for institutional investors providing a GBP100 million rescue for the firm.

"This is a fundamentally good business, and there's plenty of appetite to back it - but at the right price," one investor told Sky News.

Sky News added the fundraising was likely to come through a share placing as opposed to a rights issue and may exceed GBP100 million. Conviviality shares were suspended on Wednesday at 101 pence, but investors speculated to Sky News the placing price could be as little as 10 pence.

Sources told Sky News that on Friday Conviviality's lenders - Barclays PLC, HSBC Holdings PLC and Royal Bank of Scotland PLC - had been asked to provide bridging funding to allow the company to continue until it had raised the additional capital.

https://news.sky.com/story/last-orders-for-bargain-booze-boss-11292840

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