Carpetright confirms it is looking at a possible Company Voluntary Arrangement (CVA).
Carpetright has secured a £12.5m capital injection from a major shareholder which will cost it £2m and give it 3 months breathing space. The company has confirmed that it is looking at a CVA and after that it will raise additional capital through a rights issue.
The weekend papers were reporting that the company was considering a CVA as a way of restructuring its property portfolio.
A spokesman for Carpetright said: “As announced on March 1 we are examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet. “This process is ongoing and the group will update the market on these initiatives as required.”
Carpetright chief executive Wilf Walsh said it would be “business as usual” for the flooring firm’s stores during Easter and it would remain in “close contact” with staff over its restructuring plans: “I am pleased that we have secured this additional support from one of our major shareholders as we continue to explore the feasibility of a CVA and a conditional equity issue.
Carpetright disappointed investors when it said that its sales were down 3.6% after a dismal Christmas period of trading and it would be likely to make its first full year loss. It also said that it was entering into talks with its lenders to ensure that it did not breach its covenants.
Carpetright has suffered as a result of the sluggish property market as well. Unless the situation does improve then it is likely that they may have to ask their creditors for more help.