Crisis-hit cafe chain Patisserie Valerie has been saved from collapse after entrepreneur Luke Johnson offered the company a rescue plan with two loans of up to £20m.
Johnson, who owns a 37% stake in the company, has committed to a bridging loan of up to £10m to help the company pay off its outstanding debts. He has also entered into a £10m three-year loan agreement with Patisserie Valerie on an interest and fee-free basis.
The company also wants to raise approximately £15m by issuing approximately 30,000,000 new ordinary shares of one penny each. The group confirmed that it had a net debt of approximately £9.8m.
Johnson invested into the cafe chain in 2006.
On the afternoon of Friday 12 October, Patisserie Holdings released a statement which said historical statements on the cash position of the company were “mis-stated and subject to fraudulent activity and accounting irregularities” and confirmed the accounts were “likely to have affected the historical financial statements of the company”. It went on to estimate that its annual revenue and EBITDA, before exceptional one off costs, for the year ending 30 September 2019 could be approximately £120m and £12m, respectively. It will re-audit its financial statements for release on 30 September 2018.
Patisserie Valerie warned it could be forced to cease trading after an investigation into “potentially fraudulent accounting irregularities” led to the discovery of a unpaid tax bill of £1.14m and a winding up petition from HMRC.
Its CFO Chris Marsh was suspended from his role and has since been arrested and released on bail. The Serious Fraud Office confirmed that it had launched an investigation into him.