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Drinks Wholesaler Conviviality Close To Administration

Drinks wholesaler Conviviality, the owner of Bargain Booze and associated wine merchants, is according to reports close to administration, after failing to raise £125 million to save the business.

The company has fallen into severe financial hardship this month following an accounting error in its books which led to an unpaid £30m tax bill.

In a statement the company said: “The company is in discussions with its lending banks and advisors regarding other possible options and is in receipt of a number of inbound enquiries regarding a potential sale of all or parts the business. A further update will be made as appropriate.”

Directors have said the business will continue to trade in a bid to preserve as much of its value as possible while enquiries regarding the potential sale of all or part of the company are considered, however it added that shareholders were likely to receive little or no value.

Some 2,600 people work across Conviviality’s brands which include Matthew Clark, Bibendum, Catalyst, Bargain Booze, and Wine Rack.

It had aimed to raise £125m through an equity placing in order to refinance the business. Drinks giant AB InBev urged its shareholders to support the placing due to the importance Conviviality’s distribution channels have in getting its products to customers.

But the initiative failed, despite what Conviviality described as “good levels of demand”.

This decision to try and refinance the company came after chief executive Diana Hunter stepped down following the double whammy of profit warnings.

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