Retail Warehouse Saved With a CVA

• In the North West our client had two superstores. One is quite profitable, while the other is bleeding cash and losing £1.1 million annually.
• A creative company voluntary arrangement was used to terminate the non-performing store’s rental and rate obligations. Saving rent of around £900,000 per year.
• Total yearly fixed and overhead costs have been reduced by £2 million across the business.

• Sales are expected to be £10 million in the first 12 months of the CVA period. Profits are expected to increase significantly.
• The number of employee positions saved is 67. There are 42 employee roles that have been made redundant. The government’s Redundancy Payments Service will cover the costs of redundancies and lieu of notice claims.
• £4.5 million in secured bank debt remains unaffected.

According to KSA’s managing director, Keith Steven “With the loss-making store shuttered, the company will be able to focus on sales through its profitable retail store and online sales platform, both of which have previously performed well financially. This instance demonstrates the significant impact that a well-structured CVA may have on cost reduction and ensuring the business’s survival and recovery. We’d like to thank HSBC Bank for its significant support for our client’s management and choice for using the CVA approach”

The KSA Group saved 65 jobs at a beer company.

With a total VAT, beer duty, PAYE, and NIC debt of £1.35 million, this was a complicated time to pay arrangement.

Our modelling team created estimates demonstrating the working capital required to sustain the company’s rapid expansion, as well as an affordable time to pay arrangement. After HMRC approved the TTP, investors and members injected more than £750,000.

Negotiation With Mini-Bond Holders

KSA negotiated with bondholders of our client, a recycling company, to extend the maturity dates of £6.1 million of bonds by 12 months. A meeting was held, and 98% voted in favour of the idea. We also worked with HMRC to allow tax payments to be paid over time. This gave our customer breathing room to raise cash for their future expansion. All of this was accomplished without using any costly formal insolvency, such as a CVA, Scheme of Arrangement, or Administration.