Patisserie Valerie will issue £15m worth of shares, in a final attempt to save the company from bankruptcy.
The 92 year-old cake chain was expected to collapse after it uncovered fraudulent activity around its financial accounts and was served a wind-up order by HMRC of over £1.14m.
CEO Luke Johnson then loaned the company £20m to stave off bankruptcy, but doubts remained over the company’s future.
He told investors at a meeting today that the emergency fundraising in October had been enacted when the firm was just “three hours” away from going bankrupt.
While 99% of shareholders approved the rescue plan, Mr Johnson and other members of the management team, including chief executive Paul May, faced fierce criticism over the company’s financial troubles.
Shareholders took aim at the emergency fundraising, which they said would dilute their current stakes in the company.
Half the money loaned by Mr Johnson to the business will be returned to him once the £15 million worth of shares have been issued.
A collapse could affect 24 stores across Central and North London, including at St Pancras, Spittalfields and Oxford Street.
The Serious Fraud Office (SFO) has opened a criminal investigation into potential fraud at the company following the discovery of a black hole in its accounts.
Shares in the company are still suspended on London’s junior AIM market following its brush with collapse.
Today’s financial boost is expected to keep the company afloat for the foreseeable future.
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HeadlinePatisserie Valerie shareholders angrily agree to £15m rescue plan
Short HeadlinePatisserie Valerie announces £15m rescue plan
StandfirstForeign investors are to purchase the shares in a move backed by current shareholders
Patisserie Valerie will issue £15m worth of shares, in a final attempt to save the company from bankruptcy.
The 92 year-old cake chain was expected to collapse after it uncovered fraudulent activity around its financial accounts and was served a wind-up order by HMRC of over £1.14m.
CEO Luke Johnson then loaned the company £20m to stave off bankruptcy, but doubts remained over the company’s future.
He told investors at a meeting today that the emergency fundraising in October had been enacted when the firm was just “three hours” away from going bankrupt.
While 99% of shareholders approved the rescue plan, Mr Johnson and other members of the management team, including chief executive Paul May, faced fierce criticism over the company’s financial troubles.
Shareholders took aim at the emergency fundraising, which they said would dilute their current stakes in the company.
Half the money loaned by Mr Johnson to the business will be returned to him once the £15 million worth of shares have been issued.
A collapse could affect 24 stores across Central and North London, including at St Pancras, Spittalfields and Oxford Street.
The Serious Fraud Office (SFO) has opened a criminal investigation into potential fraud at the company following the discovery of a black hole in its accounts.
Shares in the company are still suspended on London’s junior AIM market following its brush with collapse.
Today’s financial boost is expected to keep the company afloat for the foreseeable future.
