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Discover Leisure CVA passed by creditors 16 June 2009

Mark Firmin, restructuring partner at KPMG and CVA Nominee said: “I am very pleased that the CVA proposal has been approved by 99.7 per cent of the company’s creditors.  This high level of support indicates that the proposal struck the right balance between meeting the needs of the company and those of its creditors, which are expected to receive a dividend of approximately 22p in the pound; significantly more than would have been available to them through an administration.  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.

“This is the second proposal we have successfully advised on recently, after JJB became the first plc to implement a CVA last month.  The growing use of CVAs in this wave of restructuring activity shows that alternatives to entering administration are achievable.  Indeed a head of steam is building behind moves to reform the insolvency regime, as announced in the Budget, with the insolvency practitioner community calling for change that would enable the increased use of CVAs.

“We expect to see further fall out in the leisure sector in the UK over the summer.  In spite of the growing trend for so-called 'stay-cations', consumers are pulling a tight rein on discretionary spending; having far-reaching consequences on the financial stability of the many and varied businesses in the leisure sector, from hotels to caravan retailers.”



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