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Fri 12th Oct 2018 - Update: Patisserie Holdings reveals rescue plan, Cat's Pyjamas, Rarebreed Dining
Patisserie Holdings to launch £15m share placing supported by £10m loan from Luke Johnson to stay afloat: Patisserie Holdings is planning to raise £15m through a share placing supported by a £10m loan from chairman Luke Johnson to stay afloat. Johnson has also said he will provide a bridging loan of £10m to fund the group's immediate outstanding liabilities. That loan would be repaid following the placing. The company stated: "Patisserie Holdings announces the company, in conjunction with its professional advisers, has now further progressed its initial investigation into the shortfall between the group's previously reported financial status and the actual financial status of the group. The board of directors of the company believes the current financial position of the company is such it requires an immediate cash injection of no less than £20m without which there is no scope for the group to continue trading in its current form and would therefore need to appoint administrators. Following the initial investigation, the Directors can confirm the group has net debt of about £9.8m. Historical statements on the cash position of the company were mis-stated and subject to fraudulent activity and accounting irregularities as set out in the announcement of the company on 10 October 2018. This activity and the irregularities are, in the directors view, also likely to have affected the historical financial statements of the company. The directors estimate based on current run rate information available, annual revenue and Ebitda, before exceptional one off costs, for the year ending 30 September 2019 could be approximately £120m and £12m, respectively. However, the directors emphasise that these statements and amounts are based on the limited work performed to date, and cannot be verified until there has been a further work conducted including the re-audit of the company's financial statements and the preparation of the 30 September 2018 year end audit. Moreover, shareholders should be aware the investigations into the company's financial irregularities remain at a very preliminary stage, and will be subject to further, comprehensive review in the weeks and months to come. At this stage, the directors cannot predict the outcome of those investigations with any degree of certainty. Any further findings of financial irregularity within the group could result in yet further material losses for the company, its shareholders and wider stakeholders. The company's shares remain suspended from trading on AIM. At present, the directors do not expect that suspension to be lifted at least until there is there is greater clarity disclosed to the market around the financial position of the group and they are satisfied that the company's financial reporting function is appropriate for a quoted company. Accordingly, the Company proposes to raise approximately £15m through the issue of approximately 30,000,000 new ordinary shares of one penny each in the capital of the company at a price of 50 pence per share by way of an accelerated bookbuild. The placing comprises a proposed firm placing of 10,000,000 placing shares utilising the company's existing shareholder authorities to issue new shares on a non-pre-emptive basis for cash and a conditional placing of approximately 20,000,000 placing shares subject to shareholder approval in general meeting to be convened as soon as practicably possible following this announcement. In conjunction with the placing and in order to provide immediate liquidity to the group, the company expects to enter into a new £10m loan agreement with Luke Johnson later today, the company's executive chairman. The loan is for a three-year term and made on an interest-free/fee-free basis and will be secured in due course. Due to the nature of the settlement period of the placing, Luke Johnson will commit a further bridging loan facility of up to £10m to provide the company with the ability to fund immediate outstanding liabilities. The company will repay the amount of the bridging loan drawn down in full immediately upon receipt of the placing proceeds following firm admission and conditional admission. The net proceeds of the placing and funds advanced pursuant to the loan and the bridging loan will primarily be used to fund the group's immediate outstanding liabilities, including amounts owed to HM Revenue & Customs, trade creditors, general working capital purposes and committed capital expenditure. The company expects the group's principal lenders to enter into standstill agreements with the group and to agree not to take action to enforce the recovery of their outstanding indebtedness for a period of 12 months. The standstill period will, however, terminate in the event that the placing does not complete, or certain insolvency procedures are commenced against the group. Based on the current information available to them, the directors believe that upon completion of this equity and debt fundraising, the group will be able to continue trading in its current form for the foreseeable future. Shareholders should be aware that without the loan, the bridging loan and the proceeds of the placing the group would need to immediately secure alternative financing. There can be no guarantee that alternative financing will be available to the company in the required amounts or on acceptable terms for the ongoing working capital requirements of the group and therefore the group would likely enter into immediate administration."

The Cat's Pyjamas acquired in pre-pack deal by founder’s partner: Indian kitchen and craft beer concept The Cat’s Pyjamas has been acquired in a pre-pack deal securing more than 100 jobs. The Cat's Pyjamas, led by Alison White, appointed Lee Lockwood and Bob Maxwell, of Begbies Traynor in Leeds, as joint administrators on 5 October. The five-strong restaurant group was immediately acquired by Meow Hospitality, which, according to filings at Companies House, names White’s fiancé Paul Baron, who is behind the I Am Doner kebab shop concept, as its sole director. Based in Headingley, Leeds, The Cat's Pyjamas was founded in 2015. It has restaurants in Leeds, Headingley, York, Harrogate and Sheffield as well as a central kitchen in Kirkstall that also operated as a head office. Administrators said the business had traded successfully but suffered from cash flow problems due to its rapid growth. A buyer was sought and, after a period of marketing, its business and assets, with the exception of the central kitchen, were acquired in a pre-pack sale, saving the jobs of the company's 102 employees and ensuring its continuity.

Rarebreed Dining to open flagship Reading venue in December for third site: Pub company Rarebreed Dining will open its third and largest site, in Reading in December. The company will launch The Corn Stores, which will be its flagship venue, in Forbury Road. The Victorian-listed building is being restored to feature a large ground-floor bar, a steak restaurant on the second floor and a members’ lounge on the top floor – a first for Reading. The 100-cover, all-day dining restaurant will be overseen by group chef director John Sparks. All steak will be marinated with a secret rub and chargrilled on a robata grill. Signature dishes include a Rarebreed wagyu burger and surf and turf. The 100-cover bar will feature a curated list of cocktails, spirits and beer using British brands. Rare, the group’s inaugural membership scheme, will allow cardholders exclusive access to the 60-cover lounge at the top of The Corn Stores. Managing director Jordan Hallows said: “We believe in nurturing our team’s passion and creativity, experimenting and having fun, cherishing our sites to develop each of them individually into special and unique destinations.” Rarebreed Dining also operates The Plough Inn in Cobham, Surrey, and The Shurlock Inn in Reading. Havisham Group, a privately owned investment fund founded by David Brownlow, invested £6m of committed equity capital and institutional leverage in Rarebreed Dining in August 2016 to fund its acquisition of The Shurlock Inn and further expansion.

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