Conviviality is the on the brink of collapse today after the company said it would appoint administrators to run the business within the next two weeks.
This will lead to the potential break-up and piecemeal sale of a business that encompasses Bibendum and Matthew Clark, as well as the Wine Rack and Bargain Booze retail chains, employing more than 2,500 people.
The current crisis was sparked by the issuing of a profit warning by Conviviality earlier this year, followed by the shock revelation that the company had failed to account for a £30m tax bill, which was due for payment by the end of March.
CEO Diana Hunter (interviewed here in happier times) quit her role last week, as the company embarked on a desperate bid to raise £125m from investors to keep Conviviality afloat.
Last night Conviviality admitted that this attempt had failed, despite ‘constructive discussions’, saying that there was ‘ultimately insufficient demand to raise the full £125m’. And this morning the company announced its intention to appoint administrators within 10 business days, ‘unless circumstances change’.
‘The directors intend to allow the business to continue to trade, and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business,’ it said in a company statement.
Shares in Conviviality continue to be suspended.