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Conviviality in talks with lenders after cash call flops
Conviviality Plc, the owner of the Bargain Booze and Wine Rack chains, said it was talking to its lenders and advisors about other funding options, including a potential sale of all or parts the business after failing to scrape together a £125m round of emergency cash.
Just days after the chief executive Diana Hunter departed on the back of a series of profit warnings, the company reported "good levels of demand" after its "significant number" of meetings with potential investors but ultimately insufficient demand to raise the full £125.0m it felt was needed.
"The company is 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," the AIM-listed company said, in a statement after market close on Wednesday. "A further update will be made as appropriate."
Failure to raise the required funds was likely to lead to administration, according to a report from Sky News earlier, which suggested PricewaterhouseCoopers could be be appointed as administrator as soon as Thursday, with an emergency turnaround plan possibly involving PwC partner Brian Lochead joining the company's finance department.
Conviviality revealed earlier this month that it had received an unexpected £30m tax bill, leading to the suspension of its shares.
A number of the company's suppliers are also understood to have deserted the company, hamstringing efforts to raise new funding.
Two weeks ago, the company said it would try drum up funds from a share placing, saying tax authorities, creditors and customers were remaining supportive. This came after a profit warning was followed by a shelving of the interim dividend and "discovery" of the £30m tax bill that threatened its banking terms.
The company supplies over 700 off-licences and more than 23,000 pubs and restaurants across the UK, making it one of the biggest players in the country's beverage industry.
The company owns retail arms Bargain Booze, Bargain Booze Select Convenience and Wine Rack, as well as wholesaler brands including Matthew Clark, Bibendum and Walker & Wodehouse.
Just days after the chief executive Diana Hunter departed on the back of a series of profit warnings, the company reported "good levels of demand" after its "significant number" of meetings with potential investors but ultimately insufficient demand to raise the full £125.0m it felt was needed.
"The company is 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," the AIM-listed company said, in a statement after market close on Wednesday. "A further update will be made as appropriate."
Failure to raise the required funds was likely to lead to administration, according to a report from Sky News earlier, which suggested PricewaterhouseCoopers could be be appointed as administrator as soon as Thursday, with an emergency turnaround plan possibly involving PwC partner Brian Lochead joining the company's finance department.
Conviviality revealed earlier this month that it had received an unexpected £30m tax bill, leading to the suspension of its shares.
A number of the company's suppliers are also understood to have deserted the company, hamstringing efforts to raise new funding.
Two weeks ago, the company said it would try drum up funds from a share placing, saying tax authorities, creditors and customers were remaining supportive. This came after a profit warning was followed by a shelving of the interim dividend and "discovery" of the £30m tax bill that threatened its banking terms.
The company supplies over 700 off-licences and more than 23,000 pubs and restaurants across the UK, making it one of the biggest players in the country's beverage industry.
The company owns retail arms Bargain Booze, Bargain Booze Select Convenience and Wine Rack, as well as wholesaler brands including Matthew Clark, Bibendum and Walker & Wodehouse.
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