Pic: The Times
Sushi crisis puts CVA on the menu; printer faces winding up petition; Presco swoop; suicide bidding is back; mystery of the fake invoices; and another retailer in trouble
Another day and more bad news as retailers, restaurants and printers collapse as the UK gets set to experience a recession like no other. Those with long memories will recall the mid-1970s recessions and the 1980-81 slump that continued for five quarters as did the one in the early 1990s. The most recent one was the Credit Crunch of 2008-09 but the one that is coming looks even more serious since a vaccination for Covid-19 is not likely to arrive anytime soon.
Sushi is off the menu
Company Rescue has reported on the financial problems at YO! Sushi who are exploring plans to seek a CVA.
They said: “Sushi chain, YO!, adds to the list of restaurant chains exploring the insolvency mechanism of a company voluntary arrangement (CVA) in order to reduce unsustainable rental costs it is facing. Deloitte have been appointed to look at the company's options. Though the formal decision to go ahead with a CVA has not been confirmed yet, it is looking very likely, and sources say the company ’would have little choice but to pursue one’."
YO! Sushi owns 70 restaurants some of which may have to close prompting more job losses.
Company Rescue said: “Some of the sites where the company has not yet been able to agree concessions with landlords no longer trade under the YO! brand. Where discussions with landlords had already been successful, the chain has been able to reopen restaurants, in accordance to the government measures.”
In the UK, the chain has around 1,400 employees across its restaurants. It also has sushi kiosks in more than 50 Tesco stores. It is using the Panku brand to introduce concessions in Asda.
The High Court in Manchester
Winding up petition
The Covid-19 cull of industry continues with a petition in the high court ledge to wind up Harlrequin Print Limited. Registered in Birkenhead the firm’s petition is scheduled to be heard in Manchester on August 27.
Anyone intending to appear on the hearing of the petition (whether to support or oppose it) must give notice of intention to do so to the Petitioners Solicitors in accordance with Rule 7.14 by 4pm the day before. The Petitioner’s Solicitor is The Insolvency Service, Legal Services Directorate, 16th Floor, 1 Westfield Avenue, Stratford, London, E20 1HZ. Tel: 0207 637 6644.
ICSM Credit wish to stress Harlequin Print Limited has no connection with Harlequine Print and Packaging in south Wales.
Pic Print Week
Update on Joto Print Finishing
The trade publication Print Week has reported on the fate of the liquidated firm Joto Print Finishing. Richard Stuart-Turner wrote on their website: “Finishing consumables supplier Presco UK has acquired the goodwill and assets of Joto Print Finishing, including the exclusive UK distributorship for Rilecart's wire-binding spools. The Hertfordshire outfit ceased trading in early June and Verulam Advisory was appointed as liquidator of the business on 7 July."
Swindon based Presco UK completed the deal to purchase the company's goodwill and assets from the liquidator around a fortnight ago the trade magazine reported.
Richard Stuart-Turner continued: “The deal will see 16-staff Presco UK take on the UK sales of wire-binding spools for Italian manufacturer Rilecart's machines. The company said ‘large stocks’ of the spools will soon be available for next-day delivery, and that previous Joto prices will be held.”
Ibstock have seen profits fall
Suicide bidding is back
Building magazine has reported on a new wave of suicide bidding for contracts as construction firms desperately fight for work. Dave Rogers reported: “The havoc caused by covid-19 on the industry has been underlined in two new reports with a leading London cost consultant reporting that cut-throat bidding has returned while nearly half of the industry’s quoted firms have issued profit warnings in the first six months of this year. A string of quoted firms has begun announcing their half year results with all seeing profits fall, with some, including M&E contractor T Clarke, materials firm Breedon and brickmaker Ibstock, slipping into the red.”
Ian Carrotte of ICSM Credit commented: “Suicide bidding is a dangerous game as if the client sticks to the bid it can end up bankrupting the company. What a bidder hopes is the client makes so many changes to the original spec that the bid is no longer valid.”
Pic Bloomberg
Case of the ‘fake’ invoices
The collapsed Dubai based health supply firm NMC Health is being investigated over ‘fake’ invoices which it used as evidence to banks to take out loans. Matt Oliver for the Daily Mail reported: “The hospitals provider, which was forced into administration by lenders in April, reportedly used sham documents as evidence that it had placed orders for the supplies.”
“The fake sales are said to have been funnelled through drugs company Neopharma, which is controlled by NMC founder BR Shetty, and its joint venture Nexgen. Neopharma is investigating alleged fake invoices and whether they underpinned debt-raising by NMC. Thousands of fake transactions are thought to have been carried out, raising questions about oversight from banks and NMC’s auditor, EY.”
EY is one of the so-called ‘big four’ accountancy and insolvency firms who have been criticised over failing to spot irregularities in a string of company audits.
Ian Carrotte of ICSM Credit said: “Creditors to NMC Health must be wondering if they will ever get anything. The idea that you can hide £3bn of debt is beyond me.”
Retailers in trouble
The Federation of Small Businesses said 53,000 jobs have been lost by small retailers during the Covid-19 crisis around a quarter of shops shedding staff.
Larger retailers such as Debenhams and WH Smith have been letting staff go in their thousands while Drapers have reported on another retailer seeking a CVA to save themselves.
Grace Whelan in The Mail reported: Womenswear chain Select is reportedly pushing ahead with a third company voluntary arrangement (CVA) to slash rent amid the coronavirus pandemic. It comes after the business struck a deal last year to keep its 169 stores open having entered administration. Select is working with advisors Howard Kennedy, according to The Telegraph. It has reportedly failed to pay rent since coronavirus hit and its previous CVA with creditors was automatically terminated on May 8 after a landlord demanded payment.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk