Patisserie Valerie chairman pledges multimillion-pound rescue loan

15 October, 2018, 07:55 | Author: Regina Silva
  • Birmingham-based cake shop chain Patisserie Valerie remains on a knife edge today

The company aims to raise £15m from selling new shares on the stock market.

The company, which employs 2,500 staff in more than 200 stores, said the funds raised through the planned share placement would be used to pay back around half the money loaned by Mr Johnson, as well as to meet outstanding liabilities including a £1.1m tax bill owed to HM Revenue & Customs.

The developments come after the Serious Fraud Office stated it had "opened a criminal investigation into an individual" on Friday, without mentioning names.

"Without an immediate injection of capital, the directors are of the view that that is no scope for the business to continue trading in its current form".

Patisserie Valerie's chairman has swooped in with a rescue loan package after a black hole in the company's accounts led to its finance chief being arrested on suspicion of fraud.

"A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation".

"He has been released under investigation".

In a trading update yesterday afternoon Patisserie Valerie said: "The board has now reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business".

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A further statement was expected from the company later on Friday to update investors on the hunt for new capital to shore up its finances.

Historical statements on the cash position of the company were misstated and subject to fraudulent activity and accounting irregularities, directors said.

Mr Marsh was suspended from his role while the circumstances of the financial black hole were examined internally.

Two Patisserie Valerie branches in London were closed on Friday, while the chain's parent company teetered on the brink of collapse.

The company has been struggling to stay afloat after "significant, and potentially fraudulent, accounting irregularities" were reported on Wednesday.

It relates to £1.14 million owed to HMRC.

Chairman Luke Johnson said at the time: "We are all deeply concerned about this news and the potential impact on the business".

The woes of Patisserie Holdings, which only past year the tycoon had described as "just about my most successful venture", are threatening to wipe out the majority of his £165 million stake in the business and to call into question his ability to do deals - the raison d'être of private equity.

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