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Monday, 23 July 2012

The Green Drinks Company looking to exit administration via a CVA

The Green Drinks Company is looking at a company voluntary arrangement (CVA) as a way of exiting from administration it has been reported.  The company supplies a vending machine system using pouched beverages.  The system needed much investment in order to establish themselves in the market and key investors were not in a position to invest in the business. Administrators at Milsted Langdon in Bristol were appointed on 24 May 2012. The crunch came when there was a "health and safety issue" with the vending machines that were in place and they would have needed addition parts fitted.  Given the financial restrictions it was deemed that this was not feasible and the business had to cease trading.  A total of £3m has been invested in the company.

An estimated outcome statement reveals that, on 16 July 2012, the syndicate which provided bridging investment is owed £100,000 as the company's secured creditor.

Preferential creditors are owed £12,205. A total of £2,724,568 is owed to unsecured creditors, including £606,889 to trade creditors, £93,000 to employees and £24,679 to HM Revenue & Customs. A £2m loan is also owed to Finasucre.

Despite this report we are unsure how this could work as if the company has stopped trading then  it will need to start up again and generate revenues to pay the creditors. Of course, we do not know the exact position of the company but it may be that the "health and safety issue" has been resolved at minimal cost. 

Read about how a company can exit and administration via a CVA

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