KPMG UK comments on the company voluntary arrangement (CVA) proposal announced today by Giraffe Concepts Ltd.
Commenting on the company voluntary arrangement (CVA) proposal announced today by Giraffe Concepts Ltd, Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said:
“This CVA seeks to address the cost of the company’s leasehold obligations across a number of unprofitable sites, and if successful, will put the business on a surer financial footing. Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder.”
The company currently holds 70 sites, of which 13 would see a rent reduction under the terms of the CVA, and a further 27 would face closure. The proposed supervisors of the CVA are Will Wright and David Costley-Wood from KPMG’s Restructuring practice.
Giraffe Concepts needs to secure at least 75% creditor approval for the CVA for it to proceed. A detailed proposal document is expected to be made available to creditors via a dedicated website today. The creditors will vote on the CVA on 21st March 2019. KPMG will spend the coming weeks in talks with creditors to ensure they understand the full detail of the proposal.
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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.
About KPMG in the UK
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