Patisserie Valerie collapses into administration after talks with lenders fail to save the cafe chain
- Patisserie Holdings reveals it has appointed administrators after fraud
- Cafe chain has 206 sites and the administration puts 2,800 jobs at risk
- The £40m black hole emerged last October and it has been fighting for survival
- Chairman and entrepreneur Luke Johnson extends loan to get staff paid
Troubled cafe chain Patisserie Valerie has fallen into administration after last ditch talks to save it failed.
The High Street chain, established in 1926, had been locked in talks with lenders, including HSBC and Barclays.
But a statement to the stock exchange today revealed that it was unable to renew its bank facilities as a result of the fraud that emerged last year and had appointed administrators.
Chairman and high profile entrepreneur Luke Johnson has extended an interest-free personal loan to the business to make sure staff get paid.
Patisserie Holdings had been locked in talks with lenders, including HSBC and Barclays
The cafe chain has 206 sites and the administration puts 2,800 jobs at risk.
The statement said: ‘Patisserie Holdings plc announces today that, as a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due.
‘As a consequence, the directors have appointed partners at KPMG as administrators to the company and its various subsidiaries.
‘The Chairman Luke Johnson has personally extended an unsecured, interest-free loan to help ensure that the January wages are paid to all staff working in the ongoing business.
‘This Loan will also assist the administrators in trading as many profitable stores as possible while a sale process is undertaken.’
Shareholders have attacked Patisserie Valerie’s bosses over their handling of the crisis crippling the cafe chain.
The company had been pleading with HSBC and Barclays to extend a £9.7m loan arrangement which expired on Friday.
Experts had warned that the cafe chain’s parent, Patisserie Holdings, could be losing money after it admitted the impact of a £40million fraud was worse than previously thought.
How Patisserie Holdings fell from grace after an accounting black hole emerged last year
Mark Brumby, chief executive of advisors Langton Capital, said: ‘This is not comforting for the banks and makes the company hard to value for potential interested parties.’
The group warned last week that earnings are likely to be far lower than the £12m forecast.
The discovery of a £40m black hole in the Patisserie Holdings’ accounts in October almost sank the firm, with 56-year-old serial entrepreneur Johnson taking charge of the fight for survival.
There was an exodus of management and Johnson was the only original member of the five-man board left, while former finance director Chris Marsh was arrested and released on bail.
Former auditor Grant Thornton is also being probed by the Financial Reporting Council, the accounting watchdog.