LONDON (Alliance News) - Patisserie Holdings PLC on Tuesday said it has appointed KPMG as administrators as extensive fraud prevented it from renewing loans.
The Patisserie Valerie cake shop operator found a GBP20 million black hole in its financial accounts in October and work carried out by its forensic accountants has since found "very significant manipulation of the balance sheet and profit and loss accounts".
The firm undertook a heavily discounted share issue which raised GBP15.7 million and Chair Luke Johnson loaned a further GBP20 million.
On Monday, Patisserie Holdings said it remained in talks with lenders to extend the standstill on its bank facilities past Friday. If this failed, HSBC Holdings PLC and Barclays PLC could demand repayment of GBP9.7 million of overdraft debt.
Moreover, the Sunday Times reported that trading subsidiary Patisserie Valerie would likely collapse if emergency talks between Johnson and its lenders proved unsuccessful.
"As a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due," Patisserie Holdings said.
Johnson has extended an unsecured and interest-free loan to ensure January wages are paid to staff and to assist administrators in "trading as many profitable stores as possible while a sale process is undertaken".
Due to his large holding in the company, Johnson's loan is considered a transaction with a related party under AIM rules.
Barclays (BARC)
HSBC Holdings (HSBA)
