Conviviality files notice to appoint administrators
Conviviality, which recently warned of going bust if £125m in financial backing could not be found, failed to secure the funds needed to pay off its £30m tax bill and £30m debt to creditors.
As a result the employer of 2,500 people is looking at other options including the sale of parts of its business.
The beleaguered distributor owns five brands, including Bibendum and Bargain Booze.
In an update released today, Conviviality said: "Further to the announcement on 28 March 2018, and following discussions with its lending banks, the board has resolved to file notice of intention to appoint administrators to the company.
"Unless circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days.
'Secured creditors'
"The secured creditors can, however, appoint administrators without the requirement for notice.
"The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.
"Further announcements will be made as appropriate."
The business's shares remain suspended until further notice, the statement added.
Yesterday (28 March), Conviviality announced it had failed to raise the £125m needed to support its future, despite "a significant number of meetings with potential investors".
The company said it was in discussions with banks and advisors in the hope of finding other options, which could include "the potential sale of all or parts of the business".
Pubs in a panic
Conviviality's situation has left many pubs in a panic, since it supplies a significant proportion of national chains.
One national chain told The Morning Advertiser it was tentatively looking at its options in the event of the wine business crumbling.
Around 25,000 restaurants, hotels, pubs and bars are supplied by Conviviality.
On replacing Diana Hunter as head of the firm, interim chairman David Adams issued a statement claiming Conviviality would have relationships with its customers for years to come.
He said: "We’re a profitable business with the very best route to market in the UK – and our suppliers, franchisees, producers and customers know this."
In its most recent statement, the company once again thanked the industry for "standing by our side".
