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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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