Off-licence retail group seeks £125m to resolve overdue payments and explore alternatives
- Conviviality seeks £125m fundraising to avoid bankruptcy
- Third profit warning in a month issued
- Meetings with institutional investors planned
- Exploring other funding alternatives
- CEO Diana Hunter resigned recently
- Expected adjusted EBITDA for the year ending 29 April 2018: £45.5m-£46m (if successful)
- Net debt expected to be below £100m if successful
Conviviality, an off-licence retail group, has announced its urgent need for a £125 million fundraising bid to prevent bankruptcy. The company is arranging meetings with institutional investors through Investec Bank to raise the funds, which will resolve overdue payments for creditors and settle a £30 million tax bill. Conviviality also confirmed it’s exploring other funding alternatives if the placing fails. If unsuccessful, the company may not be able to continue trading. Recent CEO Diana Hunter resigned on 20 March after discovering the surprise tax bill due on 13 March. The expected adjusted EBITDA for the year ending 29 April 2018 is £45.5m-£46m if successful, with net debt below £100m.
Factuality Level: 7
Factuality Justification: The article provides accurate information about Conviviality’s financial situation, its need for raising funds, the reason behind CEO resignation, and the expected changes in EBITDA and net debt. However, it lacks some details on the company’s background and could be more concise.
Noise Level: 3
Noise Justification: The article provides relevant information about Conviviality’s financial situation and its need to raise funds to avoid bankruptcy, but it lacks in-depth analysis or exploration of the underlying causes and potential solutions. It also does not offer actionable insights for readers.
Financial Relevance: Yes
Financial Markets Impacted: Conviviality, HMRC, institutional investors
Financial Rating Justification: The article discusses Conviviality’s urgent need to raise funds to avoid bankruptcy and its impact on the company’s financial situation, as well as mentioning HMRC and institutional investors. It also mentions potential implications for the company’s EBITDA and net debt.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Financial Crash or Crisis
Impact Rating Of The Extreme Event: Severe
Extreme Rating Justification: Conviviality is facing bankruptcy, urgently needing to raise £125m and experiencing a surprise £30 million tax bill which led to the resignation of its CEO. This financial crisis has significant consequences for the company’s operations and future prospects.
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