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Patisserie Valerie could collapse this week if last-ditch talks fail | Patisserie Valerie could collapse this week if last-ditch talks fail |
(about 15 hours later) | |
The troubled cafe chain Patisserie Valerie could collapse this week if last-ditch talks with its banks fail. | |
Luke Johnson, Patisserie Valerie’s leading shareholder, has been seeking to extend a standstill agreement on its bank facilities – protecting the chain from action to recover debts – which officially expired at midnight on Friday. | Luke Johnson, Patisserie Valerie’s leading shareholder, has been seeking to extend a standstill agreement on its bank facilities – protecting the chain from action to recover debts – which officially expired at midnight on Friday. |
On Monday morning the company issued a statement saying that talks with its banks continued and it would provide an update when they were concluded. | |
Without an agreement, the company’s lenders, HSBC and Barclays, could demand repayment of debts that may amount to nearly £10m, potentially forcing Patisserie Valerie to call in administrators. | Without an agreement, the company’s lenders, HSBC and Barclays, could demand repayment of debts that may amount to nearly £10m, potentially forcing Patisserie Valerie to call in administrators. |
Other options include a second bailout by Johnson, the multimillionaire chairman of the business, who pumped £20m of his money into Patisserie Valerie to keep it afloat after the company uncovered “potentially fraudulent” accounting irregularities and a financial black hole in October. Johnson was paid back £10m after other shareholders later put up £15m in new funds. | Other options include a second bailout by Johnson, the multimillionaire chairman of the business, who pumped £20m of his money into Patisserie Valerie to keep it afloat after the company uncovered “potentially fraudulent” accounting irregularities and a financial black hole in October. Johnson was paid back £10m after other shareholders later put up £15m in new funds. |
The company, which operates 200 cafes and employs 3,000 staff, is expected to provide an official update on its position to the stock market on Monday. | The company, which operates 200 cafes and employs 3,000 staff, is expected to provide an official update on its position to the stock market on Monday. |
In a statement last week, Patisserie Valerie warned profits would be “materially below” the estimated £12m when the company first flagged up fears of fraud. It said cashflow was also much lower than expected. | In a statement last week, Patisserie Valerie warned profits would be “materially below” the estimated £12m when the company first flagged up fears of fraud. It said cashflow was also much lower than expected. |
The chain revealed it had hired the advisory firm KPMG to consider all options, raising speculation that Patisserie Valerie could be facing insolvency, mass store closures or a debt-for-equity swap. | The chain revealed it had hired the advisory firm KPMG to consider all options, raising speculation that Patisserie Valerie could be facing insolvency, mass store closures or a debt-for-equity swap. |
On Sunday, Johnson could not be contacted, and Patisserie Holdings declined to comment on developments over the weekend. | On Sunday, Johnson could not be contacted, and Patisserie Holdings declined to comment on developments over the weekend. |
Shareholders in Patisserie Valerie, which was previously valued at £450m, are braced for considerable losses. Shares were suspended in October and have yet to restart trading. | Shareholders in Patisserie Valerie, which was previously valued at £450m, are braced for considerable losses. Shares were suspended in October and have yet to restart trading. |
The company’s finance director, Chris Marsh, was arrested by Hertfordshire police and bailed in October. He resigned that month. The Serious Fraud Office confirmed it had opened a criminal investigation into an individual but has not given further details. | The company’s finance director, Chris Marsh, was arrested by Hertfordshire police and bailed in October. He resigned that month. The Serious Fraud Office confirmed it had opened a criminal investigation into an individual but has not given further details. |
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