Sat, 13 Nov 2010 | ADMINISTRATION
Following the fall of Pontin’s, the British ‘Hi-De-Hi’ holiday operator, into administration on Friday, one of the appointed insolvency practitioners, Jane Moriarty of KPMG, said she was confident that the business would attract plenty of interested bidders.
Moriarty said, "Pontin's is an iconic British brand which forms the backdrop to thousands of treasured family holiday memories”.
The Mail on Sunday said that C&C Alpha Group, the investment vehicle of Bhanu Choudhrie, has partnered with the Dubai Royal Family to make a £15 million offer to the administrators for a quick deal. Choudhrie already looked the business over several months ago, but walked away after failing to secure an agreement with the owners on the sale price. However, the administrators said on Monday morning that no approach had yet been made to them by C&C Alpha.
Pontin’s was originally set up in 1946 by Fred Pontin to provide low cost self-catering holidays. In 2007, the business was bought by Ocean Parcs, a consortium headed by Graham Parr, who used to be Pontin’s CEO when it was under different ownership.
Pontin’s employs 850 people across five sites in Sussex, Somerset, Merseyside, Wales and Suffolk. Another site in Blackpool was closed down by Pontin’s several months ago. One of KPMG’s first jobs was to appoint an interim leisure operator to ensure the continued operation of the firm, and early indications are that SNR Denton has bagged the deal.
Earlier last year, Pontin’s announced that it would be increasing its workforce by 2,000 employees to a total of 4,000 and that £50m would be invested into refurbishing its sites.
The company’s forecasts of the number of Brits opting for ‘staycation’ holidays at their holiday sites proved somewhat optimistic, as competition in the short breaks holiday sector has been fierce. Customer complaints about conditions at some of the sites surfacing on the internet have not helped matters.
Nevertheless, Parr said that trading at Pontin’s remained strong, but that Santander had withdrawn its working capital support after a plan for drawing down the debt had not met the bank's ambitious expectations. The bank denies that it was responsible for pushing Pontin's over the edge, and that the responsibility fell squarely on the Pontin's directors for not having restructured the company's debts as agreed.
Moriarty backed the bank's stance, saying, "The sad truth is that Pontin's has seen a drop-off in occupancy levels, which ultimately caused it to run out of cash. When a business no longer has the cash to pay bills as they fall due, the directors have a fiduciary duty to call in the administrators. This is certainly the case in Pontin's."
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