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You can find the current article at its original source at https://www.theguardian.com/business/2018/oct/11/patisserie-valerie-to-cease-trading-without-immediate-injection-of-capital
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| Patisserie Valerie to close down without 'immediate injection of capital' | Patisserie Valerie to close down without 'immediate injection of capital' |
| (about 1 hour later) | |
| The stricken cakes and cafe chain Patisserie Valerie said it will have to cease trading without “an immediate injection of capital”. | The stricken cakes and cafe chain Patisserie Valerie said it will have to cease trading without “an immediate injection of capital”. |
| The owner of Patisserie Valerie was plunged into financial crisis on Wednesday after it revealed a multimillion-pound accounting black hole and that its main trading subsidiary was facing a winding-up order. | The owner of Patisserie Valerie was plunged into financial crisis on Wednesday after it revealed a multimillion-pound accounting black hole and that its main trading subsidiary was facing a winding-up order. |
| On Thursday, the board said there was a “material shortfall between the reported financial status and the current financial status of the business” and it would need new funds to continue trading. | On Thursday, the board said there was a “material shortfall between the reported financial status and the current financial status of the business” and it would need new funds to continue trading. |
| It said the company was “assessing all options available to the business to keep it trading and will update the market in due course”. | It said the company was “assessing all options available to the business to keep it trading and will update the market in due course”. |
| The company’s options for a cash injection include an emergency loan, a rights issue or a white knight bidder who may insist on a pre-pack administration process. | |
| Duncan Swift, the head of food advisory at the accountancy firm Moore Stephens, said he was aware that some suppliers to Patisserie Valerie’s trading subsidiary, Stonebeach, had paused deliveries until the position of the company was clarified. | |
| Swift said Stonebeach should not be able to make new orders or take credit from suppliers, adding that only products already in transit and unable to be recalled were likely to be delivered in the coming days. | |
| “A winding-up order would normally be the death knell for a business. The saving grace may be that it is part of a larger group which has got financial support and shareholders with reserves they could use to refinance the company,” he said. | |
| The 92-year-old cake chain, which has more than 200 stores and more than 2,500 employees, on Wednesday halted trading in its shares as it revealed “potentially fraudulent” financial irregularities that, according to Sky News, could amount to more than £20m. | |
| Just hours after the suspension, Patisserie Holdings said its board had been unaware that HM Revenue and Customs had filed a winding-up petition at the high court against Stonebeach over an unpaid £1.14m tax bill. The petition was filed on 14 September and published in the London Gazette, the official public record, on 5 October. | |
| The winding-up petition enables other creditors to call in their debts and is likely to have prompted banks to freeze Stonebeach’s accounts and credit insurers to withdraw cover for its suppliers. Patisserie Holdings declined to comment. | |
| All transactions from 5 October are subject to scrutiny and in such cases the directors could potentially be held personally accountable for trading while insolvent. | |
| Patisserie Holdings is understood to have called in PricewaterhouseCoopers to carry out a forensic analysis of its books. It is also expected that the Financial Reporting Council and the Financial Conduct Authority regulators will examine the issues at Patisserie Valerie. The Serious Fraud Office could also potentially look into the matter. All three bodies declined to comment on whether they had yet been in touch with the company. | |
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