KPMG secures Discover Leisure CVA

Creditors of troubled caravan business Discover Leisure have agreed to a company voluntary arrangement, allowing some breathing space from its debts while restructuring takes place.

The CVA was granted for the AIM-quoted company's main trading subsidiary Signlease Ltd at a meeting in Leeds today, representing the second deal KPMG has pushed through recently. Sports retailer JJB became the first plc to hammer out such a deal last month.

Creditors settled for a deal which will see them get 22p in the pound back on their original investment, but this is far higher than the amount they would receive under a normal administration procedure, KPMG said.

Mark Firmin, restructuring partner at KPMG and CVA nominee said: 'I am very pleased that the CVA proposal has been approved by 99.7 per cent of the company’s creditors.

'This high level of support indicates that the proposal struck the right balance between meeting the needs of the company and those of its creditors, which are expected to receive a dividend of approximately 22p in the pound; significantly more than would have been available to them through an administration.'

The move allows the business to continue as a going concern to keep trading and to continue the restructuring it began some time ago, and offers some security to the 300 company employees.

Firmin added that there would be more corporate casualties across the entire spectrum of the leisure sector in the near future.

'We expect to see further fall out in the leisure sector in the UK over the summer. In spite of the growing trend for so-called 'stay-cations', consumers are pulling a tight rein on discretionary spending,' he said.

'This has far-reaching consequences on the financial stability of the many and varied businesses in the leisure sector, from hotels to caravan retailers.'