Conviviality, the troubled wholesaler of alcoholic drinks in the UK, has said it will call in administrators within 10 days after failing to raise £125m to save its business.
In an update posted to the London Stock Exchange today the company said: “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.”
Directors have said the business will continue to trade in a bid to preserve as much of its value as possible while enquiries regarding the potential sale of all or part of the company are considered.
Conviviality’s board had yesterday said shareholders were expected to receive “little-to-nil value”.
Multiple sources have told The Caterer that Conviviality’s fall into administration could have severe repercussions for many of the23,000 operators in the hospitality industry it supplied.
Among Conviviality’s customers is the 900-strong JD Wetherspoon group, which has said that deliveries from the supplier continue and it hopes a solution can be found, but has a contingency plan in place.
This morning’s news follows two profit warnings this month and the discovery of an unexpected £30m tax bill.
Company shares on AIM were suspended 13 days ago after the discovery of the bill, which had to be paid by the end of the month.
The company had hoped to raise £125m to settle the tax bill with HMRC, resolve overdue payments with creditors, repay the group’s £30m credit facility and provide cash to recapitalise the business.
Last week the chief executive of Conviviality, Diana Hunter, stepped down with immediate effect from the business, which employs more than 2,600 people.
Conviviality became the UK’s largest alcoholic drinks wholesaler following the purchase of Matthew Clark in 2015 and Bibendum in 2016.