Mon, 28 Mar 2011 | ADMINISTRATION
Two weeks after commencing a CVA process, Oddbins has now requested to be put into administration for protection against its creditors.
We reported two weeks ago that the CVA would involve selling a third of its stores and making 15 head office staff redundant. Now, after a creditor recently issued a winding-up petition against it, Oddbins aims to enter administration as a ‘purely precautionary’ measure.
Having applied for administration, the off-licence chain will now have a ten-day breather or ‘moratorium’ in which no claims against the company can be processed.
A meeting due to take place on March 31 will determine Oddbins’ future. If the go ahead for the CVA is not given – it needs the approval of 75 per cent of the creditors - it will be formally placed into administration on April 4 at a court hearing.
Oddbins built up a £6 million debt with HMRC last year, with an agreed ten-month repayment plan for £600,000 per month. Oddbins' owner Simon Baile denied this last week.
A source close to the business commented on the situation: “Even if HMRC votes yes to the CVA, they will ask Oddbins to put up a bond of about £3-£3.5 million just to cover duty liability, so essentially it would go straight into administration.”
A senior trade person said: “They haven’t actually put a penny into the business – they’ve essentially been taking working capital out of the business to make payments. Creditors have in a very real sense been funding the acquisition of Oddbins and they’re being asked to refinance the rest of the deal.”
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