Luke Johnson puts up £20m rescue package for Patisserie Valerie
Luke Johnson has put up a £20m rescue package for crisis-struck Patisserie Valerie, consisting of a £10m loan and a further bridging loan of up to £10m.
Parent company Patisserie Holdings has confirmed historical statements on the cash position of the company were mis-stated and subject to both fraudulent activity and accounting irregularities, as was announced on Wednesday.
It said that the business requires an immediate cash injection of no less than £20m, without which it adds "there is no scope for the group to continue trading in its current form and [it] would therefore need to appoint administrators". Directors emphasised that investigations remain at "a very preliminary stage", and will be subject to further, comprehensive review in the weeks and months to come with any further findings of financial irregularity potentially resulting in yet further losses.
Johnsonhas put up a £10m, three-year loan on an interest-free basis, as well as the offer of a further £10m bridging loan to provide the company with the ability to fund immediate outstanding liabilities including amounts owed to HMRC and creditors.
The bakery chain has also successfully raised approximately £15.7m through the issue of 30,000,000 new shares.
Directors said they believe that upon completion of this equity and debt fundraising, the group will be able to continue trading in its current form for the foreseeable future.
However, they warned shareholders that without the rescue package, the group would need to immediately secure alternative financing, without which it would likely enter into immediate administration.
The group has confirmed net debts of approximately £9.8m and said that the irregularities are likely to have affected the historical financial statements of the company. Directors estimate that annual revenue and earnings before one off costs for the year ending 30 September 2019 could be approximately £120m and £12m, respectively - although stressed that its investigations are preliminary.
In its half-year report made earlier this year the group reported year-on-year pre-tax profit growth of 14.2% for the six months to 31 March 2018, up from £9.7m the previous year to £11.1m.
The company also announced this morning that suspended chief finance director Chris Marsh was arrested by the police last night on suspicion of fraud by false representation and has been released on bail.
Update: Patisserie Valerie finance director arrested on suspicion of fraud >>
