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Thursday, 31 May 2012

KSA Group's Insolvency Practitioners want to rescue businesses

KSA Group have three insolvency practitioners at the firm.  Eric Walls, Wayne Harrison and Professor Grant Jones. 

Why are we different? 

Simply we always look at rescuing a business as the first option. If it is not viable then we will look at terminal insolvency options such as administration or liquidation.  Mind you administration's main aim is company rescue!  Unfortunately in many instances it ends up in the closure of the business. 

The CVA or company voluntary arrangement is what we are experts at.   Many others don't think they work... We have rescued over 400 businesses using it so we know what we are doing. So, yes, they do work if done properly.

Surface Heating Systems UK Limited in liquidation

Meeting of the Creditors of the above named Company will be held at The Holiday Inn Express, M6J10, Tempus 10, Tempus Drive, Walsall, WS2 8TJ on 7 June 2012 at 11.45 am
See the full notice below:

Clinton Cards could be sold next week

According to reports in Retail Week, the administrators at Zolfo Cooper are aiming to sell the business and remaining stores by, or even before, the 8th of June.  

Given that the total debt owed to American Greetings, who in effect brought in the administrators after buying the debt for £35m remain the front runner.  This is mainly due to the fact that the card chain has been valued at between £10m and £20m.  As such, any other bid would have to be in excess of £35m for American Greetings to step aside.   Bids have been received from Card Factory, WHSmith, and investment funds Endless and OpCapita.  The administrators have said that American Greetings is not the only remaining bidder....

Dominique Schurman, the boss of US greetings cards retailer Schurman Retail Group, which runs the US Papyrus cards chain, has flown to the UK to lead talks with Clinton Cards’ head office team about how it might take the retailer forward if American Greetings secures a deal.

American Greetings are keen to buy Clinton Cards as it would give them access to the UK card market.

Wednesday, 30 May 2012

KSA Group Sponsors The Turnaround Management Association

KSA Group is proud to announce that they have become Gold Sponsors of the Turnaround Management Association UK Chapter (TMA). 
TMA (UK) President, Bryan Green said "I am delighted to welcome KSA Group back into the Association as Gold Sponsors and I am sure the relationship will be mutually beneficial. I am particularly excited about their plans to support the TMA(UK) regions and assure them of our co-operation across the country".
KSA Group will be holding seminars in the TMA regions to help promote the use of company voluntary arrangements and turnaround solutions.
 KSA Group MD, Keith Steven, says "I have enjoyed many years of close relations with the TMA (UK) and have worked for, and alongside, many of its members and member firms over the years.
I was pleased to serve on the TMA (UK) board some years ago and have always maintained my personal membership. Now, however, I feel that the time is right for a greater corporate presence and KSA Group looks forward to supporting the TMA across the UK, especially in the regions, and engaging with increasing numbers of operatives within the turnaround space in these challenging economic times."
Negotiations between KSA Group and TMA(UK) have been handled by Jonathan Reeves of Set Up And Go Ltd. Jonathan, himself a TMA (UK) member, will be co-ordinating the UK-wide activities of KSA Group within the TMA.

Fitness First to propose CVA

Fitness First, the struggling gym operator is expected to put a company voluntary arrangement (CVA) proposal to landlords this week,  which will see it giving back around 67 of its 140 outlets.  It is understood that if the business returns to profitability that the landlords will see a higher return.  This is a simple "profit ratchet" that has been a feature of many of our CVAs. 

Fitness First has struck a deal with its lenders over its £560m debt. The lenders have signed a waiver over its quarterly interest rate bill of £18m but the shareholders will receive nothing and the company will be controlled by its lenders.

This level of debt is very high for a business with only 140 units.  So why is this? 

Well, there is the fact that the company has property leases in expensive locations and all their equipment is on hire.  Lenders quite like to lend in the good times as there is a steady stream of cash from memberships which can service the loan repayments.

Tuesday, 29 May 2012

Glasgow Rangers CVA Published

The CVA proposal has been published by the administrators, Duff and Phelps today.  The creditors meeting is to be held on the 14th June.  This does not give the creditors much time to consider the proposals. 

For the CVA to be approved, HMRC will need to vote in favour as it is owed a minimum of £14m, which could rise to £79m depending on the outcome of the tax tribunal.  The other major creditor Ticketus is owed £27m.

The CVA if approved by creditors will allow the club to exit from administration and continue to play in the SPL.

However the proposed funds available to unsecured is £5m which represents a small proportion of the total unsecured debt of c. £55m.  Essentially the proposal is offering less than 10p in the pound for unsecured creditors.  However it should be noted that the football creditors; players and other clubs will receive 100p in the £1 as a result of the "football creditors rule".  As a result the return to unsecured creditors is lower than normal for a CVA where the average is nearer 35-40p in the £1.

Dewey Leboeuf UK operations in administration

Dewey & Leboeuf's UK operations have been placed into administration following the largest ever legal collapse.  BDO business restructuring partners Mark Shaw and Shay Bannon have bee appointed joint administrators.  The US based firm went into chapter 11 last night with the partners blaming the "Great Recession" on the company's collapse.  However, they have also admitted that their ambitions for growth coupled with the large packages they paid to senior executives to encourage lateral moves were also to blame. 

The firm had huge debts as it tried to fund its expansion and there balance sheet showed that they had  a deficiency of some $52m (£33m).  90 employees are expected to remain in order to wind the business down. 

The Chapter 11 petition says Dewey expects to pay off its unsecured creditors, a group that includes banks, vendors, and other law firms. In a press release, the firm said the filing was made "to preserve assets and wind down its business in the most orderly and efficient way possible".

Law firms are finding themselves under pressure as corporate activity such as mergers, floats, asset sales etc remains depressed.

If you are a struggling law firm we have specific pages on how we can help law firms that are in financial distress.

Coryton oil refinery to close

Following the collapse into administration of Petroplus earlier this year the Coryton oil refinery is likely to close as the necessary finance to keep it open has not been forthcoming.  No buyer has come forward either.  The refinery needed £625m to keep it open and the closure is likely to lead to 500 job losses.  The refinery provides some 20% of the fuel in London and South East.  However, BP one of its main customers said that there was not going to be any disruption to supply as there were alternative distributors.

The administrators at PwC entered into an arrangement in February which allowed operations to continue at the Coryton refinery while various restructuring and sale options were explored.

However, the administrator said today that due to an “over-supplied” European refinery market any sale or restructure was not going to be possible.

Close to the M25, the 586-acre Coryton refinery was bought by Petroplus from BP for 1.4 billion US dollars (£714.6 million) in June 2007.

The refining market has come under pressure in recent years as operating expenses and the cost of crude oil surge at a greater rate than the value of the products.  This is a big blow for Essex as there are many businesses involved in the supply chain and a loss of many skilled jobs.

If you work at Coryton then read our help for employees page. 

If you supply the business and it looks like this is going to put your business under pressure then give us a call.

Monday, 28 May 2012

Business Debt Advice from KSA Group

Many businesses are doing well despite the recession but all the while they are being held back by an historic debt. The reasons for the debt may have passed and whatever caused the debt may have been rectified. However, the debt still makes its presence felt but making it hard to arrange new finance and generally draining cashflow.

KSA Group can help companies by using rescue techniques such as CVAs, pre-pack administrations, trading administrations. We can also negotiate on your behalf with a time to pay arrangement with HMRC if you can't pay VAT, PAYE and other taxes.

Have a look at our new page on business debt advice which highlights a number of reasons why businesses find themselves in debt and what can be done about it.

If debts mount up it is essential that you take advice from professionals rather than try and borrow more money.

Retail administrations in 38% rise in Q1

According to Wilkins Kennedy, the accountancy firm, the number of business that went into administration went up by to 670 in the 1st quarter of 2012 compared to 458 in the last quarter of 2011.  During this time the number of retailers that went in to administration rose by 38%.  Obviously the collapse of Clinton Cards is still fresh in peoples minds but is the high street really in such a bad way.

Looking at the statistics on a year by year basis the following picture emerges:
We have taken our figures direct from the Insolvency Service and the Office of National Statistics.  In the Q1 2011 the number of businesses that went into administration was 782 compared to 779 in Q1 of 2012.  So a fall then!  But yes, there was a big rise in retail administrations from 34 in Q1 2011 to 57. 

So all in all retail is having a tough time but overall the number of businesses falling into administration is not rising.  So which businesses are faring best?  Construction, Transport, restaurants, travel and especially manufacturing have all shown a fall in the number of businesses going into administration.  Manufacturing administrations fell by 36%!

All this is not surprising given our exports are doing well while consumer spending is falling.

Friday, 25 May 2012

HMRC lose case on football creditor rule

In a blow to HMRC, the High Court has ruled that the "football creditor rule" is not unlawful.  HMRC were trying to overturn the rule whereby the club, managers and players were paid in full in the event of insolvency whereas the other unsecured were often left with nothing.  This breached, in their view, the fundamental principle that unsecured creditors should be treated equally.   Read our pages for more information on the football creditors rule

HMRC have not yet decided if they want to appeal.  This case has been ongoing since last year and had to be delayed pending the outcomes of a couple of cases where the issue of treating creditors fairly was being looked at,  mainly in connection with the collapse of Lehman Brothers.

Is my pub or hotel insolvent?

KSA Group rescue pubs and hotels!

Higher taxes, squeezed spending and variable weather has put pressure on pubs and hotels in recent months. 

Why not read our  "Complete Expert's Guide to Turning Around Your Struggling Pub, Hotel or Inn Business." The guide is over a 100 pages long and provides invaluable advice on your options if your business is in difficulty.

You can download the new guide on our page on how to rescue a pub business.

The guide covers:

  • Is my pub or hotel company insolvent?
  • How can a pub get a time to pay deal with HMRC for PAYE and VAT?
  • What is a Company Voluntary Arrangement and why is it a great rescue tool
  • How to cut costs in your business
  • How to deal with a winding up petition from HMRC.
And lots more

Thursday, 24 May 2012

GDP figures revised downwards

The economy contracted by 0.3% instead of the 0.2% that the ONS originally said.  Many economists and analysts, including us at the time, said that this did not reflect the true state of the economy and that demand was holding up.  The evidence from the surveys which covered business confidence and purchasing statistics seemed to back up this view.  However, it was the very sharp contraction in the construction sector that has skewed the statistics and some have observed that demand has held up but stocks have been run down by firms in anticipation of weaker demand.

This latest news will mean that there will be further pressure on the Bank of England to restart QE and some on the committee will be mindful of the IMF's suggestion that interest rates could be cut further.

All this is also bad news the coalition as they try and  stimulate growth.

Wednesday, 23 May 2012

Canon to help Jessops - Is this the future?

Retail sales fell again in April by 3% but a large chunk of that was due to a fall in petrol sales.  The underlying fall was 1% so there are still problems on the high street.

However what is going on online?

According to reports over the weekend, Canon is expected to pump £10m into Jessops, the camera store with over 200 stores.  Jessops came close to administration a few years ago but was saved by its main lender HSBC in a debt for equity swap which saw it being taken off the stock market.  The firm is facing stiff competition from online retailers.  The company lost £12m on sales of £304m to January 2011.   It  is understood that Canon are keen to prop up the company as they value the shops presence on the high street as it allows shoppers to test and try their products before buying them online.   Surely other manufactures may take a similar line.  Clothes, Books, kitchenware....   Online sales purchasing is currently showing  year on year growth of 10%.  Of course the “ I need it now” impulse might keep this trend in check.

So will shops become just glorified frontages for online stores?  Electronics lend themselves to this sort of buying behaviour but it may only be a matter of time before shoppers will come home with no bags and await all their goods to be delivered at home!  Webvan anyone?

What happened to sensible Vince Cable

Well, he was a pro business social democrat. Wasn't he? Perhaps he is now moving more left wing than Stalin.

Conspicuous by his absence in any business debate, he looks to me like a "lifebelter" hold on til you get thrown overboard.

Any policy debate on employment reform, building business  incentive, state cost cutting, common sense is regarded by Vince, the sage, as "nonsense". Good commentary Vince.

Frankly, the next cabinet shuffle MUST include sacking Cable. 

Tuesday, 22 May 2012

Everyone likes something for free number 2!

In addition to our free cashflow spreadsheet today we are giving away our free directors toolkit, guides, cash-flow forecasts, how to do deals with HMRC all FREE click here

Free cashflow forecasting spreadsheet for directors

Everyone likes to get something for free! You don't get many handouts in business, so today we are giving away our free daily cash-flow forecasting spreadsheet for SME company directors!

Click here for your copy, no need to register or tell us who you are! Just click and download.

Monday, 21 May 2012

Director carried on running his business despite disqualification

David Field carried on managing his courier business, FDL UK, while he was serving a 4 year ban from being a company director.  The business went into liquidation owing creditors almost £400,000.

Although he had officially resigned he was involved in the day to day running of the business.  He signed cheques and was responsible for making decisions on redundancies a Court heard. 

Prior to the liquidation, David Field went on to transfer the company’s fleet of commercial vehicles to another firm for no money while selling FDL itself for just £4,600.  This sounds like what is called a transaction at an undervalue

Transferring assets for less than they are worth can be very tempting if your business is in difficulty but, in essence, if the business is insolvent and you move assets you are very likely to be running the risk of having these transactions reversed by the liquidator who can claim against the directors personally.

The Department of Business Innovation and Skills (DBIS)  launched an investigation and, when questioned, Field said he realised he should not have remained a director.

David Field admitted a charge of breaching his disqualification from acting as a company director. He was ordered to do 140 hours of unpaid community work and to pay £500 costs.

He was disqualified from company directorship for a further eight years.

Judge Paul Glenn told him: “You were disqualified in July 2009. Although you formally resigned on the day of your disqualification, you accept you took control and your wife played no active role.

Friday, 18 May 2012

W Yeomans sold in pre pack administration

W Yeomans (Chesterfield) Ltd, the independent outdoor clothing and equipment retailers with 84 stores and 435 employees has been sold in a pre-pack deal.  The business started as a shop in Chesterfield but expanded around the country and had outdoor stores in garden centres.

The company's assets and employees were transferred to Yeomans Outdoor Ltd.
The deal was brokered with Gareth Rusling and Chris White of The P&A Partnership  who were appointed administrators of the retail chain on 16 May 2012.

"In these challenging times for the retail sector we are pleased to have been able to save such an established brand and to safeguard jobs," White said.

A pre pack administration will most likely have been undertaken as there was a waiting buyer and there was an immediate threat to the likely ability of the business to trade.

Pre packs are an effective way of rescuing a company but have attracted controversy as unsecured creditors usually lose out and can feel they have been "stitched up".  Read our article on Pre packs and CVAs on

Thursday, 17 May 2012

Brilliant News for UK Car Industry & Suppliers

More good news from a resurgent UK motor manufacturing sector. More than 3,700 jobs will be created by GM and its suppliers as Ellesmere Port lands the deal to build the new Opel/ Vauxhall Astra.

The UK now exports more cars than it imports, for the first time since the early 1970's.

What happens when a business is sold out of administration?

When a business goes into administration one of the options looked as is to try and sell the business as quickly as possible to ensure an immediate recovery of monies for creditors.

See our new page on what happens in an administration sale

Spaniards Withdraw a Billion Euros out of Bankia

The bank that was part nationalised last week by the Spanish government has seen the general public pull a billion Euros out in a week.

On our theme of banks facing huge withdrawals in Greece see the pain has moved to Spain.

Do the Spanish people sense a crisis brewing in their banking system and or the return to the Peseta?

There is clearly a bumpy road ahead, we in the UK are not directly affected, but nor are we immune. Time to fasten our seat belts methinks.

Clinton Cards close 350 Stores

The administrators, Zolfo Cooper, have decided to shut 350 of the 784 Clinton Cards stores as it seeks to try and rescue the business.  All of the Birthdays branded stores will be closed.  The company had tried to sell the Birthdays stores previously but it looks like there was absolutely no value in those stores.  The administrators had said that the portfolio of real estate was simply untenable.  One has to presume that the landlords were not prepared to offer any concessions on the rental terms.

The move will see 2,800 full and part-time staff lose their jobs in a wave of closures starting next week and continuing into June.  The estate will slimmed down so that the company is more attractive to potential purchasers.  So far most interest has centred around the possible purchase by WH Smith, although there are likely to be other bidders.  Administration followed by a sale is often the best way to return money to creditors, keep the profitable part of the business going and preserve jobs.

If you are an employee of the business please refer to our help for employee pages where we give details of your rights and what compensation might be available.

Wednesday, 16 May 2012

Lola Cars may go into administration

Lola Cars International, the racing car group, which started in 1958 has filed an intention to appoint administrators citing severe cashflow problems following HMRC decision not to pay R&D tax credits.  The firm employs 172 people in Cambridgeshire and builds cars for the Le Mans race.  In a statement the firm said.

It is with enormous regret that a decision has been taken to issue Notices of intention to appoint an Administrator to Lola Cars International Limited and Lola Composites Limited. This step allows the board to continue its discussions with possible investors and prospective purchasers with a view to securing the best outcome for the staff, creditors and customers of both businesses."

The filing of a notice of intention puts a ring fence around the debts of the company for 10 days and stops creditors attacking the company.  It is summed up by their statement as it  gives them a breathing space.  It is possible that a creditor has issued a winding up petition but it has not been advertised yet

The last filed accounts in 2011 show the firm made a profit of £159k on a turnover of £6m.  The firm said it will make a further announcement on the 21st May 2012.

Meanwhile in UK unemployment falls...

The latest figures on the numbers claiming unemployment benefit showed a surprise drop of 13,700.  This is saving approximately £60m in benefits per annum and assuming they are earning there will be the tax take on top.  This yet again shows that it is unlikely that the country entered recession in the first 3 months of this year.  We await the revised figure.  Are we now moving in the right direction?

However, many of these jobs are part-time, 8 million now,  and demand is still weak so the report card is "could do better".  Self-employment has also reached a record figure of 4.1 million, up by 89,000 since the previous quarter.   Self employment is a good thing and the small businesses will help us get out of this "recession".

Certain industry sectors are still being hit hard, such as retail, and there will be some impact from the recent administrations in this sector such as Game and Clinton Cards.  Meanwhile the car industry is going from strength to strength!

Cash withdrawn by Greeks in advance of collapse

Greek people now getting that collapse is imminent?

Over E800 was withdrawn by savers from Greek banks on Wednesday. There was no panic said a central bank spokesman.

Rather like Northern Rock, the queues are going to be longer and longer until the banks collapse or the "Government" steps in and agrees to exit the Euro and reintroduce the Drachma.

Expect a 50% valuation to follow.

These look like the final days leading to a disorderly break up of the Euro. Will Spain stand by and watch its unemployment grow towards 30-40% as in Greece? Or will it, too, exit stage left? What price Italy next?

Interesting days lie ahead for banks, bond holders and governments clinging on to a failed monetary experiment. But the real worry for me is what will the populations of countries, facing economic collapse, non payment of salaries and pensions do?

Monday, 14 May 2012

Thomas Cook in administration threat

Thomas Cook warned its shareholders in a circular that if they did not agree to the company's proposed disposals the company risked going into administration.  It seems to have worked as the shareholders have all agreed to the disposal

The disposals were part of the deal agreed with its lenders that are supporting the company to the tune of £1.4bn.

The firm did worry investors when it had to ask its lenders last year to extend £100m more credit.

Friday, 11 May 2012

WH Smith in bidding to buy Clinton Cards stores

WH Smith has appeared as a possible bidder for upto half of the Clinton Cards stores according to reports, although they have declined to comment.  WHSmith bought online greeting cards operator Funky Pigeon in 2010. It has launched 9  Funky Pigeon stores on the high street.  The bid from WH Smith has taken people by surprise but they are up against American Greetings who bought £35m of the debt. The administrators will have to make sure that to whoever the business is sold to will be in the best interest of the creditors. 

What a turnaround for WH Smith!  It was only a few years ago that seemed to be in alot of trouble but they seem to have benefited from the collapse of Woolworths also they have made the clever move of having post offices in their shops and have diversified their products.

The administrators have let Clinton Cards’ chief exec Darcy Willson-Rymer go and other executives are expected to be made redundant as well.

Wednesday, 9 May 2012

Clinton Cards in administration with Zolfo Cooper taking over

So as expected Clinton Cards went into administration this afternoon as the supplier American Greetings called in the administrators at Zolfo Cooper having bought its £35m of its debt from its lenders.

More than 8,000 jobs are at risk following the collapse.   The high street spending slump is hitting retailers hard, but to be fair, the firm had been in difficulty for a long time.  A small fall in its sales was enough to push it over the edge.   American Greetings had said that Clinton Cards had run up debts and it had stopped supplying the firm and that it suspected that other suppliers had done the same.

Administrators at Zolfo Cooper said the group had made losses of £130 million since 2004 and it was "likely that a number of stores would need to close. 

Clinton Cards in administration - Almost....

Clinton Cards has suspended its shares this morning and has said it expects to be in administration. Today was expected to be the day that the firm would publish its strategic review with a closure programme or possible CVA for its loss making stores being announced.  However, quite dramatically, according to reports, the business is likely to be forced into administration by American Greetings, its main supplier, that took on £35m of debt from its lenders.   Clinton Cards employs 4800 people in 629 stores.

update:  Clinton Cards has confirmed in an announcement that this is indeed the case.

The business is likely to be sold out of administration or even a CVA with the non profitable stores closed down.

If you are an employee of the firm then please refer to our pages on help for employees.  We do not have any other information so please do not call our office

Monday, 7 May 2012 to lend to cash strapped businesses

I am not sure if I would advise any company to borrow from a lender that charges in some cases 4000% APR but then again is meant to be a loan for a couple of days.  Business loans are to "start at" 0.3% interest per week.   It is likely that they will seek personal guarantees from the directors on the loans.

If you are facing a winding up petition from HMRC and think that borrowing a few thousand to keep HMRC off your back you might think that could help.  In theory if you are guaranteed to get money in a few days and HMRC couldn't wait then might make sense.  But, to be honest, if you could prove you were getting money in a couple of weeks the most sensible course of action would be to try and get an adjournment of a hearing or even try and negotiate a time to pay deal.

So before you consider taking out a loan talk to us, its free, and we will let you know your options.

Friday, 4 May 2012

Insolvency statistics being spun as usual

The latest insolvency statistics showing figures for the first Quarter (Q1) have been met with the usual wailing and spin by the press and those who stand to benefit from any increase in insolvencies.  Yes we work in the industry but we are going to report on the statistics how we see it.

Liquidations up by 4.3% on Q1 2011
up by 0.2% on Q4 2011

Administrations, receiverships, company voluntary arrangements are all down by 1% when compared to Q1 2011 but there has been an increase in administrations when looking at Q4 2011. As these statistics are not seasonally adjusted there is no point in comparing a quarter from a different time of year.  So the terms "spike" in insolvency rates is simply misleading.   

No wonder it is difficult to get out of recession when it is all gloom and doom backed up by dodgy interpretations of statistics. Yes liquidations are up but the majority of the increase was in compulsory liquidations which are most likely smaller companies with no assets and few employees.  Creditors voluntary liquidations only saw a marginal rise of 1.8%.

Perhaps the most telling statistic was the 35% increase is liquidations in Scotland and the 18% in Northern Ireland when compared to the same period last year.  Clearly there are problems there. 

In essence with an insolvency rate of less than 1% of registered companies the things are not looking too bad for the business sector.  The commentators are right though that there are lots of unprofitable, companies that are being kept afloat by the banks not wanting to crystallise losses, HMRC's continuing support and low interest rates.  They have been coined "Zombie" companies.  Who knows how long the undead will keep going....  but keeping people in jobs is good for the economy....

Thursday, 3 May 2012

The bank will help a company survive if it can

In almost every case that we handle the bank is very much part of the rescue plan.  See our new page on how you can still save your struggling company even if the bank as security over the assets. 

The bank cannot control the actions of an unsecured creditor so they are keen that the company continues to trade even if it owes money elsewhere.  As such the bank is usually supportive of a CVA and KSA Group can negotiate with the bank to get loan repayment holidays for instance.

Wednesday, 2 May 2012

Winding up petitions advertised continue to fall

We may be in a recession, according to the statistics, but the number of winding up petitions that are being issued continue to fall.  In April 2011 the number of petitions advertised was 734 but in April 2012 the number  had fallen to 607.  This represents a fall of 17%.  In March 2012 the numbers were also down from 650 to 610 so the figures haven't been distorted by Easter.  February 2012 did see a significant rise in the number of petitions which we did report as there was a corresponding increase in the number of distressed companies at that time.

Given that HMRC issue some 60% of winding up petitions it is a clear indication of their willingness to take aggressive action.  Alternatively perhaps we are seeing a recovery in businesses financial health.  Other indicators of the economy do suggest an increase in business confidence.

If you have been threatened by a winding up petition then you must take action as the advertisement of the petition will result in the freezing of your bank account.

Tuesday, 1 May 2012

Micro Anvika CVA approved

The Tottenham Road retailer, Micro Anvika, has managed to agree a deal with its creditors over a debt of £2.7m.  Micro Anvika proposed a  company voluntary arrangement which was accepted by 84% of the creditors. However, in order to survive the company has had to close half its stores and make 60% of the staff redundant.  Last year the company's credit insurance was removed and this precipitated its problems.   The company turned over £30m last year but that was down from £43m 2 years previously. The company accounts show that it made a loss last year of £993,000. 
Advisors Re10, which Micro Anvika appointed last December to explore whether it could turn around operations, held a meeting of creditors on 26 April.  The proposal was that the creditors will receive 32 pence in the pound over 5 years. 

Micro Anvika will operate out of just two premises in London's Tottenham Court Road and one in Newcastle.  The online business will remain.

Staff have taken a salary cut and a share scheme is being finalised. The directors Atul Patel and Ramesh Gohill are now drawing a salary of £20,000 a year between them, said Re10.  In addition if the business makes more money than expected then the creditors will receive more

This does look like a strong CVA.  Radical change is being proposed and the creditors might get a bonus if all goes well.  Many CVAs do not go far enough or cut deep enough.
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