BusinessBusiness RecoveryKPMG arranges second CVA at JJB Sports

KPMG arranges second CVA at JJB Sports

Sports retailer calls KPMG in for the second time to help stave off administration

KPMG arranges second CVA at JJB Sports

KPMG HAS PROPOSED a second Company Voluntary Arrangement (CVA) for sports retailer JJB Sports in as many years.

Head of restructuring at KPMG, Richard Fleming, has proposed the CVA to prevent the company entering administration.

JJB entered into a CVA in April 2009, having gained the backing of 99.9% of creditors. KPMG partner Richard Fleming spearheaded the agreement, which saw 140 stores closed and changed rental payments to monthly from quarterly on the remaining 250.

CVAs usually repay a portion of debt owed to creditors – including landlords – over a period of time, while allowing the business to continue trading. A CVA must be voted for by 75% or more, by value, of creditors to be pushed through.

The CVA proposals could see creditors likely to receive 24.6p for every pound they are owed compared to 1.1p if the business entered administration.

Fleming, proposed supervisor of the CVA, said: “The CVA proposed by JJB today gives the company a chance to avoid administration and carry out a fundamental restructuring of its property portfolio.

Landlords will see their monthly rental payments by about 55%. However, property owners will be able to take back stores if it is in their “financial interests” to do so.

“While CVAs have come in for criticism, we believe they offer a more socially responsible alternative for companies in distress. They must always offer a better return to creditors than administration but, beyond this, they keep more of a business’ operations intact and more of the workforce in jobs, said Fleming.

The creditors will vote on the CVA on 22nd March 2011.

For more company information go to the shareprice centre

 

Related Articles

EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

4m Alia Shoaib, Reporter
Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

Business Recovery Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

8m Emma Smith, Managing Editor
Administrators from KPMG appointed to City Motor Holdings

Business Recovery Administrators from KPMG appointed to City Motor Holdings

1y Richard Crump, Writer
BHS enters administration as Duff & Phelps fail to find suitable buyer

Accounting Firms BHS enters administration as Duff & Phelps fail to find suitable buyer

1y Fraser Simpson, Reporter
BIS launches insolvency consultation

Business Recovery BIS launches insolvency consultation

1y Chris Warmoll, Writer
AlixPartners advises Store Twenty One on CVA deal with creditors

Accounting Firms AlixPartners advises Store Twenty One on CVA deal with creditors

1y Richard Crump, Writer
FRP Advisory hires new partner from KPMG

Accounting Firms FRP Advisory hires new partner from KPMG

1y Richard Crump, Writer
Former Torex CEO sues KPMG and RBS

Accounting Firms Former Torex CEO sues KPMG and RBS

1y Richard Crump, Writer