Conviviality’s investor plea
CONVIVIALITY, the troubled off-licence owner, is considering appealing to shareholders for more cash in a survival bid following the shock discovery of a £30m tax bill due at the end of the month.
The retailer and wholesaler behind Bargain Booze said it was in talks with its advisers and broker “regarding the possibility of an equity fundraise to effect a recapitalisation of the business”. Conviviality, which also owns Wine Rack and is a wholesaler to hotels, pubs and restaurants, also said HMRC had been “receptive to our needs”.
Shares in the Aim-listed company were suspended on Wednesday as it revealed the tax demand. That came just days after it warned its earnings would be around 20pc lower than expected. Conviviality scrapped its interim dividend to improve its cash position by £8.2m.
Yesterday it claimed that its customers and suppliers “remain supportive” and that it was having “constructive discussions” with lenders.
Last week’s trading update wiped £300m off its value and its shares were 101p when they were suspended, down from a high of 424p last year.