Conviviality, one of the largest wine suppliers in the UK, has said it could pursue an 'equity fundraise' as part of efforts to shore up its finances and added that initial talks with advisers had been positive.
Conviviality said on Friday (16 March) that consultancy group PwC was ‘undertaking a review of the business’ and that work so far was ‘progressing well’.
It added that management was ‘engaging with its advisers and broker regarding the possibility of an equity fundraise to effect a recapitalisation of the business’.
Trading in the company’s shares have been suspended since 14 March after the group was hit with a surprise £30 million tax bill falling due on 29 March and which was discovered less than a week after it lowered profits expectations for its latest financial year.
Conviviality is one of the largest suppliers in the UK wine trade, and owner of the Bibendum merchant as well as Wine Rack and Bargain Booze retailers.
In a previous update, Conviviality said that the tax bill had created a ‘short term funding issue’, but it said that management was confident that this would be satisfactorily resolved.
HM Revenue & Customs has been ‘receptive to our needs’, the firm said today.
It added, ‘The board wishes to express its gratitude to all its stakeholders for their on-going support during this difficult period for the company.’
Last week, Conviviality said that operating profits for the year to 29 April 2018 would likely be 20% lower than market expectations, to between £55.3 million and £56.4 million.
