UK wholesaler and distributor of alcoholic beverages Conviviality has filed for administration after it failed to persuade investors to pay the £125m needed to prevent bankruptcy. Credit: Shutterstock.

UK wholesaler and distributor of alcoholic beverages Conviviality has filed for administration after it failed to persuade investors to pay the £125m needed to prevent bankruptcy.

The board said it wanted to continue to trade and would appoint administrators to manage the process within ten business days, as well as work with banks and advisors to look for buyers for the sale of all or parts of the business.

In a stock market statement, the firm said: “The board wish to thank its customers, suppliers and employees for their continued support during this difficult period for the company.

“The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.”

As well as putting 2,600 jobs at risk and threatening alcohol supply to 7,000 off-licences and 23,000 pubs across the UK, Conviviality has said that investors are likely to receive ‘little to nil value’ for their shares.

After several years of impressive growth and acquisitions, Conviviality has had a dramatic month. This announcement follows the company downgrading its pre-tax earnings predictions for the 2017-18 financial year by 20% on 9 March, which caused its share prices to drop by 68%, reducing the company’s value by approximately £300m.

A few days later on 14 March the wholesaler discovered an unpaid £30m tax bill owed to HMRC causing it to decide it was better to suspend UK trading while it sought advice from PwC. Its shares remain suspended on the London Stock Exchange.

As a result of these successive financial failings, Conviviality CEO Diana Hunter resigned on 19 March. The company said in a statement: “The Board of Conviviality announces that Diana Hunter, Chief Executive Officer of the Company, is stepping down from the Board of the Company with immediate effect. Ms Hunter will remain with the Company for a period of time in order to provide transition support. David Adams, non-executive Chairman of Conviviality, is today stepping into the role of Executive Chairman until further notice.”

The company business is divided into two parts: Conviviality Retail and Conviviality Direct.