Business

Conviviality considers equity fundraise following surprise £30m tax bill

Wine supplier Conviviality has said it was engaging with its advisers regarding the possibility of an equity fundraise to effect a recapitalisation of the business.

The news comes after the company issued a profit warning following a statement saying it had found an unexpected £30m tax bill due at the end of March, which was not accounted for in its cash flow.

This meant its earnings would be £10m lower than expected.

This led to a suspension of Conviviality’s shares on the junior market and the cancellation of an £8m dividend payment planned for shareholders.

In a statement released this morning (16 March) the Bargain Booze owner said that PwC were undertaking a review of the business and its future funding requirements and that it was “progressing well”.

The company also said it had engaged with HMRC regarding the tax bill.

The update said: “Customers and suppliers remain supportive of the Company and are working closely and constructively with the Company at this time. We have had constructive discussions with our lenders which are on-going.

“The board wishes to express its gratitude to all its stakeholders for their ongoing support during this difficult period for the company. A further update will be provided in due course.”

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