Conviviality, the parent company of the UK’s biggest on-trade wholesaler Matthew Clark, as well as the Bargain Booze, Select Convenience, Central Convenience and Wine Rack retail chains, is hoping to raise funds through a £125m equity placing.
The company said meetings with investors have been arranged for the coming days to effect an equity placing, which the directors believe will provide the necessary funding to recapitalise the business. The company’s share price tumbled by £300m last week, and CEO Diana Hunter fell on her sword.
Conviviality said the proceeds will be used to: resolve overdue payments with its creditors and return them to normalised trading terms; settle payments with HMRC; repay its £30m revolving credit facility; and provide working capital headroom and fund costs to turn the business around.
The placing would be subject to the approval of shareholders.
However, Conviviality warned: “If the company is unable to raise funds by way of the placing or otherwise, it is unlikely to be able to trade on a going concern basis.”
The company added it continues to explore ‘other funding alternatives’ in the event that the placing is unsuccessful.
A further announcement will be made in due course, Conviviality added.
Some media outlets have speculated that some parts of Conviviality may be hived off, raising the possibility that Matthew Clark might eventually go up for sale.