Discover Leisure CVA clears final hurdle

YORKSHIRE caravan retailer Discover Leisure has passed the final hurdle in getting acceptance for its Company Voluntary Arrangement.

Although creditors voted to accept the CVA last month, in a move aimed to help the company move forward following a slump in trade and restructuring, the formal acceptance of the CVA could not be granted for 28 days under a ‘challenge period’.

However, the period expired “without any such challenge being made”.

The CVA will see unsecured creditors recoup 22p in the pound compared to if the East Yorkshire firm had gone into administration, which would have seen them recover far less and has been avoided thanks to the CVA process.

Revised facilities with Discover’s banks have also been previously agreed.

Covenants based on gross profit, underlying earnings, loan to asset value and net cash flow have been placed following the revised banking facilities with Lloyds and Royal Bank of Scotland.

The company’s main trading subsidiary, Signlease, has hundreds of unsecured creditors ranging from small parts suppliers to HM Revenue & Customs.

The firm had entered Signlease into the CVA, a formal procedure which enables a company to agree with its unsecured creditors debt repayments.