21st Jan 2019 09:44
LONDON (Alliance News) - Embattled cafe chain Patisserie Holdings PLC said Monday it remains in talks with lenders to extend the standstill of its bank facilities beyond January 18.
The company, which operates the Patisserie Valerie cake shop chain in the UK, stopped short of revealing any further details and said it will issue an update when discussions with lenders have concluded.
Monday's pre-market statement by Patisserie Holdings followed a Sunday Times report that trading subsidiary Patisserie Valerie may collapse as soon as Tuesday if emergency talks between major shareholder Luke Johnson and its lenders fail, The Sunday Times reported.
The newspaper said Johnson intends to extend a standstill agreement on the bank facilities, which expired on Friday last week. If he fails, HSBC Holdings PLC and Barclays PLC could demand repayment of GBP9.7 million of overdraft debt.
Last Wednesday, Patisserie said its previously announced discovery of accounting manipulation was more serious than expected and as a result profitability would be significantly below prior guidance. The next day the company reported the departure of Deputy Chair Lee Ginsberg.
Back in October, Patiserie said it had found a GBP20 million black hole in its financial accounts, necessitating a heavily discounted share issue which raised GBP15.7 million. In addition, Chairman Luke Johnson also gave a life-line to the company by loaning GBP20 million.
The company guided for GBP120 million in revenue and earnings before interest, taxes, depreciation, and amortisation of around GBP12 million, before exceptional costs.
The company, following revelation of the misstatements, has appointed a new chief executive and made a number of other appointments after finding evidence of fraud. These include a new interim chief financial officer, new non-executive director, new commercial director, and new production director. Other management appointments have also been made.
Shares in Patisserie were suspended from trading on AIM in October.
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Patisserie Holdings Plc