Cash injection saves Patisserie Valerie
Patisserie Valerie has been pulled back from the brink of collapsing by entrepreneur Luke Johnson, who has provided the company with a £20 million loan.
£10m Over Three Years
Mr Johnson, who currently owns 37% of the company, has agreed to provide £10 million for a three year period, which is set to provide the firm with immediate liquidity.
In addition, he has also offered a further £10 million as a bridging loan to cover any immediate shortfalls or unbalanced budgets.
In addition to this £20 million, Patisserie Valerie has also raised another £15 million by issuing new shares.
Since early October, the company has been fighting for survival after it was widely reported that the firm had uncovered severe and potentially illegal accounting irregularities.
For his part in the story, the company’s financial director, Chris Marsh, was arrested and has subsequently been released on bail.
The Serious Fraud Office announced that it had opened a criminal investigation into Mr. Marsh, but is unable to give any other information about the case at this present time.
Patisserie Holdings is the parent company of Patisserie Valerie and four other firms, with Patisserie Valerie being by far the biggest and most well known of these. It currently has 206 stores across the UK and employs over 2,500 people.
Mr. Johnson first invested in Patisserie Valerie back in 2006 and is known for investing in a wide variety of companies, including Pizza Express, Majestic Bingo, and the swimming firm Zoggs.
Recovery Play, Dead Cat Or Falling Knife?
Although the company has been struggling over the past few weeks, with shares being suspended from trading (at 429p per share), experts have suggested that Mr. Johnson would not have injected such a large amount into the company should it be on the verge of collapse.
Combined with the additional money raised through selling shares, the £35 million should give the company enough money to cover any immediate shortfall, as well as restore any damage done to the brand’s reputation after Mr. Marsh’s alleged financial irregularities.
Patisserie Holdings announced that shares would be able to continue trading again once the new share issue and loans had taken effect, and this would be completed as quickly as possible.