KPMG secures Discover Leisure CVA
Restructuring expert applauds creditors' approval of a company voluntary arrangement, but warns there is more fallout to come in the retail sector
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.
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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.’