The creditors of Mothercare plc have today approved its company voluntary arrangement (CVA) proposals.
Jim Tucker, restructuring partner at KPMG and joint supervisor of the CVA, said: “The approval of these CVAs is a critical component in management’s plans to create a fully refinanced, restructured business that is better equipped to move forward in today’s dynamic omni-channel retail environment.
“As with all CVAs, more than 75% of creditors had to vote in favour in order to pass the resolution. Today’s vote saw the significant majority of all voting creditors choose to approve the proposals.”
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About company voluntary arrangements (CVAs)
Where a company is experiencing difficulties in paying its debts, the directors can propose a company voluntary arrangement (CVA) whereby the company enters into a legally binding agreement with its creditors, such as their suppliers or landlords. In a similar vein to an individual voluntary arrangement (IVA), which gives an individual an alternative to bankruptcy, a CVA enables a company and its creditors to come to a compromise agreement and avoid an administration or liquidation. A CVA can provide a company with some breathing space to allow it to reorganise or restructure its funding and/or its operations with as little disruption to the day to day trading as possible, with the control of the company staying within the existing management.
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