Conviviality to enter administration
The news follows the stepping down of its chief executive, Diana Hunter, last week after the company issued two profit warnings in the space of a few days and revealed an overlooked £30 million tax bill to be paid to HMRC.
On 21 March, the company issued an update on the actions it was taking to resolve its funding requirements. This included a potential equity placing to raise £125 million which the company said would resolve overdue payments with creditors, settle payments with HMRC, repay the company's £30 million revolving credit facility, and provide working capital headroom.
In a statement issued last night, the company said: “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 £125 million.”
This morning Conviviality said that unless circumstances change, it will appoint administrators in 10 working days.
In the meantime, the company will continue to trade as its works with its advisers to preserve as much value in the business as possible and to explore inbound enquiries regarding a potential sale of all or parts of the business.
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