Conviviality To Bring In Administrators After Failing To Secure Funds

29th Mar 2018 09:53

LONDON (Alliance News) - Conviviality PLC on Thursday said it is to appoint administrators within 10 business days, a day after failing to secure GBP125.0 million it needed to recapitalise the business.

"Despite a significant number of meetings with potential investors resulting in good levels of demand, and constructive discussions with a number of key customers and suppliers regarding the provision of support, there was ultimately insufficient demand to raise the full GBP125.0 million," Conviviality had said on Wednesday over the failure to secure the money.

The company had said it was in discussions with its lending banks and advisors regarding other possible options, and is in receipt of "a number of inbound enquiries" regarding a potential sale of all or parts the business, and it said Thursday this is still the case.

Conviviality added on Wednesday it believed shareholders in the company will receive "little-to-nil" value. Shares in Conviviality remain suspended.

Wednesday's announcement came after the company last week said it continues to have constructive discussions with lenders and with HM Revenues and Customs regarding a GBP30.0 million tax bill due at the end of the month.

The GBP125.0 million placing proceeds were expected to be used to resolve overdue payments with its creditors, settle the GBP30 million tax bill, repay a GBP30.0 million loan facility and for working capital purposes.

Earlier in March, Chief Executive Diana Hunter stepped down from the alcohol wholesaler, which owns Bargain Booze. It had previously cancelled its interim dividend, having before that said it expected earnings before interest, tax, depreciation, and amortisation to be 20% below market expectations for its year ending April 29, one of several profit warnings in recent months.