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If the company is effectively bust without this £20m cash injection and no-one else will inject the cash, why doesn't he simply pay £20m as a pre-pack or demand most the equity so he can then get more or less the whole company on the cheap (it was worth >£400m a couple of weeks ago I think). I assume as a shrewd businessman he must have got some kind of decent deal like this so the other shareholders are diluted out of existence one way or another.
He can then sue the auditor and make a killing. Sweet.
I understand that he has bought shares at a huge discount 50p? as well as providing a loan. perhaps there is a hint of 'noblesse oblige'
"Let the unsecured creditors pay the bill"
This amoral approach to business is what the honest businesses have to pay for. The tradesmen and unsecured creditors of PV should never have to pay for someone's personal gain. Ripping them off is not what shrewd businessmen do.
Well done Luke Johnson for not going the money-grabbing route.
And HSBC did not pick up from the statutory accounts that it did not tie in with their banking facilities? Last time I looked you had to disclose bank borrowings.
For those interested,
https://beta.companieshouse.gov.uk/company/08963601/filing-history/MzE5N...
Accounts show £5m of liabilities with nil borrowings @ 30/09/17
Only just seen this. The following paragraph is just plain wrong.
"The company’s chairman, entrepreneur Luke Johnson, swooped to the rescue, injecting £20m into the business as a loan. PH has raised another £15m from its shareholders by issuing new shares."
1. LJ provided two loans, £10m for 3 years interest free (security to be agreed later according to the RNS), and £10m as a bridging loan pending receipt of cash from the £15m placing. The placing was completed as an accelerated book-build by the NOMAD within hours of the RNS which announced the loans and of the approx. £15m proceeds about £5m will have been available very quickly because the board already had authority to issue the relevant shares, so it's likely only £5m of the bridging loan has been used. The balance of the proceeds of the placing will come in after the EGM which is needed to approve the issue. After the EGM Johnson's loan will only be £10m, not £20m
2. The placing was NOT open to existing shareholders unless they were invited to participate by the NOMAD. Private shareholders never got a chance to participate. This was NOT a rights issue.
So much sloppy reporting of this very serious case, everywhere you look. Private Eye's report was one of the most accurate.
See cakequestions.blogspot.com
Yes; this has played out exactly how I expected per my above comment (and who can blame him? He's not a charity). See:
http://www.cityam.com/267973/chairman-luke-johnson-reveals-patisserie-va...