Patisserie Share Discussion Threads

[pugugly] 14/10/2018 09:41

Also I would suggest a massive lack of DD by the banks involved - Those at the banks who approved the overdrafts should have many questions to answer -

In particular it would appear on the surface they may not have asked as to why the overdrafts were required given the claimed balance sheet cash - also no information given as to when these overdraft facilities were st up and by whom in the company - Normal practice would be to be signed off by a high level director in the company given the need for security and pledges in favour of the bank -

[masurenguy] 14/10/2018 09:31

How on earth did Johnson, the BoD and Grant Thornton not know anything about these overdrafts? The mind boggles at the lack of any basic financial controls and that might enable this to happen!

The board of troubled cafe chain Patisserie Valerie has discovered that overdrafts of almost £10m were run up on two secret facilities, The Sunday Times can reveal. Company overdrafts had been set up with Barclays and HSBC, and £9.7m had been used by the time they were discovered last week. The disclosure caps several days of astonishing developments at the listed cafe chain that have left its executive chairman, the entrepreneur and Sunday Times columnist Luke Johnson, fighting for his fortune and reputation.

Having warned that Patisserie Valerie was on the brink of collapse, Johnson arranged a rescue fundraising on Friday. The deeply discounted sale of shares at 50p will slash Patisserie Valerie’s valuation from £446m to £68m. An initial restatement of its forecast sales and earnings for the year to next September suggests that it is far less profitable than has until now been reported. In May, Patisserie Valerie said it had £28.8m of net cash. In fact, Johnson said, investigations last week uncovered two previously secret overdraft facilities that none of the directors knew about. He said: “I didn’t even know there were bank overdraft facilities. And the banks were as shocked by things as we, the board, were, as I’m sure are the auditors.”

[johnwise] 14/10/2018 09:06

Some Light Entertainment

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[kooba] 14/10/2018 08:50

A convertible issue could probably have been arranged with conv terms less dilutive than the placing...and allowed preemption rights to all existing holders subject to dd and approval. Unfortunately there is so little clarity on how this has been allowed to happen and the desperate position that the company found itself meaning that they probably had to secure funding immediately or fail...hence immediate loan ( partly repayable) to plug the holes and stave off winding up . They also needed to show immediate cash to keep what's left of supplier good will from evaporating and suppliers refusing to deal.Having said that all financing proposals should have been investigated in the interests of ALL shareholders! LJ as an executive director and major shareholder is somewhat conflicted in trying to protect his own position....as well as having some very large questions on his oversight of this company.

[ntv] 14/10/2018 08:35

Hindsight is a wonderful thing but the clue is in the amount of profit per store per annum
I think they all knew what was going on as is doesn't take a accountant to work all out really and there should be know excuses from BoD
There was a restaurant firm floated a few years back where nett debt changed from the time of DD to time of actual flotation by 100 fold. I protested but they did sweet FA as per usual.
profits look good if you pay reduced rents and business rates in the first few years anyway
only greggs is worth investing in the sector and even they struggle at times

[smurfy2001] 14/10/2018 04:16

@thegreatgeraldo - my understanding is that the convertible debt deal would have meant not having to place shares therefore no dilution to existing shareholders

[thegreatgeraldo] 14/10/2018 01:07

Bit of PR for Amber's Christal

[hpcg] 14/10/2018 00:16

Indeed. Converts weren't they. Convert at 4 quid, not likely.

[thegreatgeraldo] 14/10/2018 00:11

I'm still intrigued by the charitable, selfless Crystal Amber plan...

[dave4545] 13/10/2018 23:52

Surely they can recover the money directors made from share options.

FD sold 666,666 at 4.16p, that is over £2 mil which the company badly needs.

It must be a crime itself to keep that money if they have been defrauding the company.

[hvs] 13/10/2018 23:35

35p when will the suspension be lifted ????

Cant see them trading when there is no information of the size of the hole and how it happened. From £ 449mill to zero in 48 hours and no one any the wiser very very very fishy,

[algernon2] 13/10/2018 23:31

Shall we start a small bet on the price the shares will end at on the first day after the suspension is lifted?
Who wants to start us off.
One guess only and no changing it.
I will say 72 pence just to get us started and is based on nothing but a pure guess.
A prize of "Kudos" will be awarded to the nearest correct guess.

[hvs] 13/10/2018 23:27

Very good question. Seems like AIM has no rules like the Board of Directors here have shown. No one knows nothing. PwC brought in to find out what is going on and how to run the company.and still no answers on what went on.

[buoycat] 13/10/2018 23:26

30 million shares of 1p each at 50p a share

[ryry0707] 13/10/2018 23:18

Are they allowed to issue the new shares (£0.50) below the par value of £1 per share? I thought par was the minimum

[hvs] 13/10/2018 22:33

A top 15 investor said there are “so many questions to ask of management, board and auditors in terms of how was it not spotted much earlier” or was it all in place at the time of the IPO

LUKE JOHNSON has questions to answer and very quickly. The 50p placing money is NOT GOING TO LAST here unless explanations are provided on what happened. The money provided by him is a loan not equity. Why did he not buy new shares ???

It wasnt me boss honest. Excecutive Chairman and serial Entrepreneur Lol !!!! Lol !!!!

Wonder what tomorrows Sunday Times column from Luke will be : Could it be : How to go from £ 440 mill in market cap to Zero , or will be it be : How £28mill in cash became £ 30 mill debt and we still dont know ??? Take your pick.

[thegreatgeraldo] 13/10/2018 22:27

"Investment fund Crystal Amber was plotting a convertible debt deal"

What was the debt going to convert into? Were they offering to convert at a price north of 50p? Not really sure how this would have "protected" small investors

[muffinhead] 13/10/2018 21:40

Cool hand Luke!

[muffinhead] 13/10/2018 21:35

£30m rescue deal ignored by Patisserie Valerie bosses


Patisserie Valerie’s management snubbed a £30m deal that would have protected small investors, it has been revealed, as furious shareholders rounded on the company last night.

Investment fund Crystal Amber was plotting a convertible debt deal to rescue the firm which would have meant investors would not have seen their stakes diluted by the emergency fund raise that offered up new shares at a huge discount.

A top 15 investor said there are “so many questions to ask of management, board and auditors in terms of how was it not spotted much earlier”

Patisserie Valerie staved off collapse on Friday, successfully tapping investors for £15m and securing two £10m loans from chairman Luke Johnson. It is thought that Mr Johnson participated in the equity raise, which was limted to large-scale investors, but it remains unclear whether his 37pc stake was diluted. Crystal Amber’s head Richard Bernstein said that the placement had protected Mr Johnson’s fortune locked up in his stake from being wiped out. He added: “Two thirds of the equity raise is going to pay back the man who owns £166m of shares that would be worth zero without a raise.”

Crystal Amber, which does not hold a stake in the firm, told Patisserie Valerie’s broker Canaccord Genuity that it was prepared to offer up to £30m to engineer a rescue but was “ignored”. On Thursday as Patisserie fought for its survival, it wrote to Mr Johnson who did not respond. The company could not be reached for comment.



Investors and banks were wrongfooted by the company’s troubles. Asset management giant Aberdeen Standard, a top 15 investor, called it “an entirely unforeseen situation” while City sources said HSBC, whose Birmingham-based team had extended the company a £4m overdraft, only found out on Wednesday morning.

Chris Marsh, the finance chief at the centre of its financial catastrophe, cashed in millions of pounds worth of shares in the business this year and has been involved in a string of businesses that have run aground. Mr Marsh was arrested on Thursday and released on bail after the café chain suspended its shares. He is now the subject of an investigation by the Serious Fraud ­Office into the crisis. Mr Marsh has sold more than £5m worth of shares since Patisserie Valerie floated four years ago, the vast majority of them in the past eight months. His share options were worth £2.8m and £2.4m respectively, making him a total profit of £2m.

Mr Marsh and Mr Johnson held the same roles at Healthy Living Centres, a chain of fitness clubs, from 2004. It is unclear whether they had exited the company before it went ­under in 2008. They also collaborated on the rescue of Fishworks, a chain of fish restaurants. Mr Marsh left the year later and the business found itself in need of another rescue.

[hvs] 13/10/2018 20:15

Was Luke Johnson around ??? Them being short of staff and all.

[barnetpeter] 13/10/2018 20:05

Went to a CAKE store today..staff said it had been packed all day. Rushed off feet because not all staff turned up. Manager was really fed up..,,cannot blame him. Doesn’t even though if he is getting paid, fee staff and demanding customers