Bargain Booze owner issues update on measures to settle imminent £30m tax bill

Drinks wholesaler Conviviality plc, owner of the Bargain Booze chain of off-licences, has issued an update on the measures it is taking to accommodate an unexpected £30m tax bill.

The Crewe-based company confirmed the tax bill earlier this week on back of an announcement that its EBITDA for the year to April 29 would be 20% below market expectations, due to an error in its forecasts

In a statement this morning (March 16), the firm said both customers and suppliers “remain supportive” and ongoing discussions with lenders have been “constructive”.

Professional services giant PwC, it said, is currently carrying out a review of the Conviviality business and its future funding requirements.

Regarding the £30m payment, which is due on March 29 2018, the firm has “engaged with HM Revenues and Customs” and the department has been “receptive” to the needs of the business. Discussions continue.

Conviviality said it is now engaging with its advisers and broker over the possibility of an equity fundraise that would be used to recapitalise the business.

The company added: “The board wishes to express its gratitude to all its stakeholders for their ongoing support during this difficult period for the company.”

Shares in Conviviality were suspended from trading on the London Stock Exchange’s AIM market on Wednesday (March 14) as the company continued to assess its funding requirements.