Troubled drinks wholesaler Conviviality on the brink of collapse
Conviviality, the troubled wholesaler of alcoholic drinks in the UK, is on the brink of collapse after failing to raise £125m to save its business.
In an update posted to the London Stock Exchange today the company said: "Despite a significant number of meetings with potential investors resulting in good levels of demand, and constructive discussions with a number of key customers and suppliers regarding the provision of support, there was ultimately insufficient demand to raise the full £125.0 million.
"The board wish to thank its customers, suppliers and employees for their continued support during this difficult period for the company.
"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."
It added: "The Board believe that shareholders in the Company will receive little-to-nil value."
There has been speculation that the company could fall into administration as early as tomorrow. Multiple sources have told The Caterer this would have severe repercussions for many operators in the hospitality industry.
The 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 chief executive of Conviviality Diana Hunter stepped down with immediate effect from the business.
Conviviality became the UK's largest alcoholic drinks wholesaler following the purchase of Matthew Clark in 2015 and Bibendum in 2016 and Sky News reports that more than 2,500 jobs could be at risk.
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