Discover Leisure creditors back CVA
CREDITORS have voted to accept a Company Voluntary Arrangement (CVA) at troubled caravan retailer Discover Leisure. It is hoped the agreement will help the company, which has two major sites in the North West, move forward following a slump in trade and restructuring, which has seen it close a number of centres.
The CVA will see unsecured creditors recoup 22p in the pound compared to the result if firm had gone into administration.
Revised facilities with Discover’s banks were also agreed at the meeting, which saw 99.7% of creditors agree the CVAl.
The company’s main trading subsidiary, Signlease, has hundreds of unsecured creditors ranging from small parts suppliers to HM Revenue & Customs. Its debts were estimated at more than £10m.
The firm had entered Signlease into the CVA, a formal procedure which enables a company to agree with its unsecured creditors debt repayments. Accountancy firm KPMG will work with Discover for the duration of the CVA, which will see Discover pay creditors £2.29m over five years.
Mark Firmin, restructuring partner at KPMG in Leeds, said: “This result allows the business to remain a going concern, to keep trading and to continue the restructuring it began some time ago, offering job security to 300 employees and some certainty to its other stakeholders.”
Mr Firmin said the CVA process was becoming more attractive to companies, after North West sports retailer JJB became the first plc to implement a CVA last month.
As part of its restructuring, Discover has five remaining larger locations at Birtley, Chorley, Darlington, Delamere and York, which accounted for 60% of the group’s revenues for the six months ended March 1, 2009.
Revenue however fell by 21% to £40.7m from £51.8m in the same period the year before. Like-for-like pre-tax loses were £9.5m compared to £1.8m.
From 2005 to 2008 Discover was on the acquisition trail, which saw the purchase of a number of outlets and centres.
