My blog
Home / news /

Patisserie Valerie seeks bank lifeline

Patisserie Valerie seeks bank lifeline

by admin
Comments are off for this post.


cakes in Patisserie Valerie windowImage copyright
Getty Images

Troubled cake chain Patisserie Valerie is facing a crucial few days after a deal with its banks expired on Friday.

The UK firm said in October it had uncovered “significant, and potentially fraudulent, accounting irregularities”.

The company’s biggest shareholder, Luke Johnson, is now in talks to extend its cash lifeline from HSBC and Barclays.

Otherwise there is a danger it could crash into administration, with KPMG having been appointed to review “all options” for the company’s future.

That could put the future of some of the firm’s 2,800 staff across its 200 cafes at risk.

As well as administration, other options could include a sale of the business, or a company voluntary arrangement – which might see shops closed and rents reduced as a means to help the company keep trading.

Another possibility could be a debt for equity swap with the firm’s creditors.

‘Significant manipulation’

If talks with the banks to extend the current “standstill” agreement – which protects the firm from action to recover debt – are unsuccessful, the financial institutions could ask for repayment of close to £10m.

Last week Patisserie Valerie confirmed it had found “extensive” misstatement of its accounts and “very significant manipulation of the balance sheet and profit and loss accounts”.

This includes thousands of false entries in its ledgers, it said in a statement.

Profitability and cash flow had been overstated and were “materially below” figures announced in October, it said.

In October it said those figures were likely to be £120m revenue for the year and earnings of £12m.

‘Devastating effects’

Multimillionaire chairman Mr Johnson put £20m of his own money into the firm to keep it afloat after the scandal first broke.

He was was repaid £10m after other shareholders later injected £15m in new funds.

Finance director Chris Marsh was arrested after having been suspended, and is still being investigated by the Serious Fraud Office and the Financial Reporting Council (FRC).

Also under investigation by the FRC are former Patisserie Valerie auditors Grant Thornton.

The Patisserie Valerie owners said last week that RSM had been appointed as auditors and KPMG had been taken on to help it “recover from the devastating effects” of the scandal.

It added that it had appointed a new chief executive and interim finance director, and that other new directorships and management appointments had been made after its October announcement.



Source link





Dominic Levent Solicitors
Email: Enquiries@dominiclevent.com
Phone: 020 8347 6640
Url:
cash, check, credit card, invoice


1345 High Rd
London, London N20 9HR

Share this article