Conviviality plc, which operates the Bargain Booze and Wine Rack retail chain in the UK, has announced that it is set to appoint administrators to the business within the next ten days.
The move to appoint administrators follows an update earlier this week from the company, in which it said that it had failed to raise funding of £125.0 million, which the company's directors believe is the minimum amount required to adequately recapitalise the business.
Briefing Note
In a notice posted this morning, Conviviality said, 'Further to the announcement on 28 March 2018, and following discussions with its lending banks, the Board has resolved to file notice of intention to appoint administrators to the Company. Unless circumstances change, and in accordance with statutory requirements, the Board intend to appoint administrators within 10 business days. The secured creditors can, however, appoint administrators without the requirement for notice.
'The Directors intend to allow the business to continue to trade and the Company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.'
It's been a challenging few weeks for Conviviality, which employs around 2,500 staff across the UK, following a number of profit warnings.
Two weeks ago, it suspended trading shares on the AIM market, after identifying an unexpected £30 million tax bill, issuing a profit warning as a result of this "arithmetic error", as the company described it.
Last week, its chief executive, Diana Hunter, stepped down, with David Adams, the group's chairman, stepping into the role of executive chairman on a temporary basis.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
