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Conviviality eyes potential equity fundraising during 'difficult period'
Alcohol wholesaler and distributor Conviviality may issue new shares to ease its financial strife, while tax authorities, creditors and customers were said to remain supportive.
Conviviality, which on Tuesday issued a profit warning and on Wednesday shelved its interim dividend and suspended its shares from trading after the "discovery" of a £30m tax bill that threatened its banking terms, said on Friday that conversations with HM Revenue & Customs found the taxman was "receptive to our needs".
A review by PricewaterhouseCoopers of the business and its future funding requirement was "progressing well" and talks have begun with nominated adviser and broker Investec regarding the possibility of an equity fundraise to recapitalise the business.
The Bargain Booze chain owner on Tuesday confirmed a warning from the week before that adjusted earnings before interest, tax, depreciation and amortisation for the current year will come in between £55.3m and £56.4m, 20% below market expectations. The change in expectations reflected arithmetic error in the compilation of the financial forecasts of the wholesale division.
Conviviality chief executive Diana Hunter has been in place since February 2013, having joined from Waitrose where she was a director. Finance director Mark Moran, ex of listed companies including Porvair, SSL International and Premier Foods, joined last October and has experience in disposals, business restructurings and major refinancing.
As of 0830 GMT, shares were suspended at 101.20p.
Conviviality, which on Tuesday issued a profit warning and on Wednesday shelved its interim dividend and suspended its shares from trading after the "discovery" of a £30m tax bill that threatened its banking terms, said on Friday that conversations with HM Revenue & Customs found the taxman was "receptive to our needs".
A review by PricewaterhouseCoopers of the business and its future funding requirement was "progressing well" and talks have begun with nominated adviser and broker Investec regarding the possibility of an equity fundraise to recapitalise the business.
The Bargain Booze chain owner on Tuesday confirmed a warning from the week before that adjusted earnings before interest, tax, depreciation and amortisation for the current year will come in between £55.3m and £56.4m, 20% below market expectations. The change in expectations reflected arithmetic error in the compilation of the financial forecasts of the wholesale division.
Conviviality chief executive Diana Hunter has been in place since February 2013, having joined from Waitrose where she was a director. Finance director Mark Moran, ex of listed companies including Porvair, SSL International and Premier Foods, joined last October and has experience in disposals, business restructurings and major refinancing.
As of 0830 GMT, shares were suspended at 101.20p.
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