Historic Somerset leather firm could go into administration within days
Historic Somerset leather manufacturer Pittards has revealed it needs to raise £1.16m or face the threat of administration.
The Yeovil firm has been struggling with its finances for some months and has now revealed it could be days away from calling in the administrators.
Pittards was founded in 1826 and is part of the rich history of leather manufacturing and glove-making in the Yeovil and Somerset area.
The company employs around 200 people in the South West and 1000 in Ethiopia.
The company manufactures leather products for third parties as well as its owned Daines & Hathaway and Hill & Friends brands.
Last month the company agreed terms on a restructure of its £10m debt facilities.
However, the loan agreement remains dependent on the firm being able to carry out a successful equity raise.
The company’s shares on the AIM market have also been suspended as a full audit has yet to be completed for the year.
Talks have been taking place around a fundraise and a trade investor has agreed, subject to finalisation of a subscription agreement, to invest up to £1m in the struggling business.
Based on a minimum fundraise of £1.16m the trade investor would be able to invest an aggregate approximately £638,670.
The trade investor’s subscription is subject to a number of conditions.
- The company successfully raising a minimum of £1.16 million of additional capital;
- New Banking Facilities are entered into;
- The passing of the fundraising resolutions without amendments at the AGM
- Admission on the market taking place.
A statement from Pittards added: “Should the company be unable to raise a minimum if £1.6m of additional capital the company would be unable to continue to trade and would most likely be placed into administration in which case the prospects for recovery of value, if any, by shareholders would be uncertain.
“The trade investors subscription remains subject to contract and there can be no guarantee that the condition of the trade investors subscription will be fulfilled or that it will completed on the terms set out.”
A further announcement is expected to be made in the coming days.