Oddbins goes into administration
- Thursday 31 March 2011
The final blow was actually struck at 4pm yesterday when HMRC (Her Majesty’s Revenue and Customs) said they would not be supporting the CVA (Company Voluntary Arrangement).
At a short meeting in London today to decide whether or not at CVA would be accepted by creditors, a representative of HMRC said they ‘could not support the proposal as they did not see it as viable.’
It is understood that there were protracted negotiations up to the very last minute between Oddbins and HMRC, which is owed over £8m by Oddbins.
As by far the biggest creditor of the stricken drinks chain, HMRC represented more than 30% of Oddbins debt.
Although 84% of creditors voted in favour of the CVA, once HMRC had voted, that figure dropped to 33%, meaning the CVA was voted down.
Simon Baile, managing director of Oddbins, said, ‘despite ongoing negotiations over the last four weeks the decision was made by HMRC late yesterday not to support the CVA.
He added ‘Oddbins is expected to go into administration’ following a hearing that will take place on Monday 4 April in the companies division of the High Court in London.
Creditors leaving the CVA hearing this morning were mostly grim and tight-lipped and offered no comment.
Nick James, managing director Pol Roger, which is owned over £200,000 said it was ‘sad it had gone this way’.
‘For a smaller company like us it is a hell of a blow. The implications of this will go right through the trade, from small growers to suppliers and distributors.’
Lee Manning, partner in Deloitte’s team handling the CVA said Oddbins would continue trading as normal, and the 400-odd staff would continue to be paid.
He said if appointed as administrator, Deloittes would hope to sell the business as a going concern. ‘We have already had two or three offers, both from the wine trade and from elsewhere.’
He added that it was unlikely the payment to creditors would exceed £0.075 (7.5p) in the pound.
Baile added, ‘We very much regret the need to make so many staff redundant prior to last night’s vote and we are working diligently to find a buyer for the majority of the business so that as many jobs as possible may be saved.’