Patisserie Valerie could collapse into administration as soon as this morning as time runs out to find a rescuer for the stricken cake chain.
The group’s parent firm Patisserie Holdings issued a stock market update yesterday saying it would cease trading without an “immediate” cash injection after discovering a major black hole in its finances.
It is understood if chairman Luke Johnson – the group’s majority shareholder – or another rescuer does not step forward with emergency funds overnight, the firm will be forced to appoint administrators.
Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings, with a 37 per cent stake.
Patisserie Valerie trades from more than 200 stores, including 13 across Scotland, with six outlets in Glasgow and five in Edinburgh.
The retailer also has a partnership with Sainsbury’s, with branded counters present in the supermarket.
PricewaterhouseCoopers, which is working with the firm on its financial position, is most likely to carry out the insolvency, but several other corporate undertakers are also thought to be waiting in the wings.
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Even if a buyer for the group does emerge, any purchase would likely be conducted via a pre-pack administration process where a new owner is able to shed onerous liabilities.
Emergency fundraising talks overseen by advisers to Patisserie Holdings were ongoing last night. Other options on the table include a loan or a rights issue.
As well as grappling with a potentially fraudulent multi-million-pound accounting black hole, Patisserie Holdings has been slapped with a winding up petition of more than £1.14 million in unpaid taxes to HMRC.
The firm said: “The company, in conjunction with its professional advisers, has during the last 24 hours undertaken further investigation into the financial status of the company.
“The board has now reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business.
“Without an immediate injection of capital, the directors are of the view that that is no scope for the business to continue trading in its current form.”
The company’s directors and professional advisers are “assessing all options available to the business to keep it trading”.
The retailer’s future was originally thrown into question on Wednesday when shares were suspended following the discovery of the accounting irregularities. Finance chief Chris Marsh has since been suspended from his role.