Patisserie Valerie saved as chairman lends cafe chain £10m

Marco Green
October 15, 2018

Patisserie Holdings said on Friday that Johnson had stumped up loans, giving it the breathing space to raise £15.7 million in a heavily discounted placing announced later in the day.

Patisserie Valerie in Norwich city centre. The company has also stopped trading shares since the scandal was uncovered.

Most of the money raised will be used to repay a £10m bridging loan from executive chairman and 37 per cent shareholder Luke Johnson today, created to give the firm immediate liquidity.

Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings with a 37 per cent stake.

Patisserie Holdings Plc finance chief Chris Marsh was arrested as United Kingdom fraud prosecutors opened a probe into an accounting scandal that threatens to shutter the cake baker's 200-plus stores.

Hertfordshire Police confirmed that a 44-year-old man was arrested on suspicion of fraud by false representation and released under investigation yesterday evening.

After discovering that it faced a winding up hearing, Patisserie Holdings said it was in communication with HMRC as it scrambled to "understand better the financial position of the group".

"We can give no further information or comment at this time".

"The company will repay the amount of the bridging loan drawn down in full immediately upon receipt of the placing proceeds".

This significantly affected the company's cash position, with the firm saying it could lead to a "material change" in its overall financial position.

Landlords for at least two Patisserie Valerie locations in London - in Hammersmith and Edgeware Road - cancelled their lease agreements with the company over breach of contract.

Mr Marsh was suspended from his role while the circumstances of the financial black hole were examined internally.

Adding to the company's headache this week was an announcement that the board had just learned of a winding-up petition that had been filed against its main subsidiary by the taxman.

The new equity and debt injection helped save 2,500 jobs and stave off the company's collapse, after it was plunged into crisis on Wednesday, when accounting irregularities emerged and Britain's tax office said it was owed £1.14 million.

Patisserie Valerie trades from more than 200 stores, including one at Resorts World Birmingham at the NEC and its branded counters in Sainsbury's stores.

Other reports by Click Lancashire

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