The Latest on some high profile CVAs.
24/7/2019.
Bathstore
On Monday it was reported that Bathstore were in talks with home base.
Homebase was reportedly close to buying bathroom chain Bathstore, which collapsed into administration last month. Talks over a deal were expected to be finalised by this weekend and it was unclear if Homebase would acquire all or just some Bathstore sites. BDO, which has been seeking a buyer for the retailer, had declined to comment.
But then it was unexpectedly announced just one day later that Bathstore has been bought out of administration by Homebase.
The company will take over 44 branches, however the deal leaves 91 remaining stores employing 200 staff at risk of closure.
Administrators at BDO said the remaining stores will only stay open until stock is sold off.
BDO’s Ryan Grant said: “In a difficult situation, we have been able to secure the future of the Bathstore brand and the transfer of 44 stores to Homebase to maximise realisations for creditors and protect as many jobs as possible.”
British Steel sale delayed
The Mail on Sunday reported on efforts to sell British Steel and delays to the deadline for bids.
The Insolvency Service appointed EY to find a buyer for the firm which collapsed into insolvency in May, with a deadline for bids initially set as June 12.
This was later extended to the end of that month, and again pushed back to last week.
Now, an email sent on behalf of Sam Woodward from EY’s restructuring team, and seen by the Mail, says: “I can confirm that we have not set any deadline to conclude a sale process.” He adds: “I also expect that there will still need to be a number of weeks of further due diligence and negotiations to conclude a transaction.”
Sports Direct v Debenhams
On Monday Sports Direct said it has “no intention of withdrawing” a lawsuit against Debenhams over the department store chain’s plan to close 50 shops as part of a CVA.
The CVA was approved in May after Debenhams entered a pre-pack administration, hitting the value of shareholders’ interests, with Sports Direct – which holds a 29% stake in the retailer – estimated to have lost £150m.
Just a day later Sports Direct pulled out of a challenge to store closure plans at Debenhams, but Mike Ashley’s firm is continuing to fund a challenge to the department store chain’s CVA by Combined Property Control Group.
Meanwhile – good news overall – Insolvencies fall in Q2
Analysis from KPMG shows that fewer companies in England and Wales went bust in the second quarter than in the first three months of 2019, with 14% fewer firms going into administration.
Blair Nimmo, head of restructuring for KPMG UK, said: “You could be forgiven for thinking there had been a dramatic increase in corporate insolvencies.”
“Prolonged uncertainty around Brexit has perhaps further delayed a ‘moment of truth’ for companies in those sectors which are more vulnerable to economic volatility.
Our advice to companies is to maximise reserves – Always plan for a worst case scenario,” he added.