Conviviality chief executive Diana Hunter has stepped down as the company continues to grapple with a surprise £30 million tax bill.
The alcohol wholesaler and off-licence retailer said Hunter, who has been chief executive since 2013, will be replaced by non-executive chairman David Adams, who will become executive chairman until “further notice”.
The parent company of Bargain Booze and Wine Rack added that Hunter would remain with the company for a period of time to provide “transition support”.
“The company is continuing to engage with stakeholders as set out in the announcement of Friday 16 March and will provide a further update in due course,” Conviviality stated.
The news comes after Conviviality said on Friday it was mulling the “possibility of an equity fundraise to effect a recapitalisation of the business” in response to an unexpected £30 million bill from HMRC that they have to pay by March 29.
Conviviality said the VAT bill was only uncovered on March 13 and had not been accounted for in its short-term cash flow projections.
This prompted a suspension of Conviviality’s shares on the junior market and the cancellation of an £8 million dividend payment that was meant to have been paid on Friday to help resolve its short-term finding requirements.
The company also confirmed that PwC had been appointed to undergo a review of the business and its future funding requirements.
Conviviality’s troubles first started the week prior when it issued a profit warning with adjusted earnings expected to come in 20 per cent below market expectations, between £55.3 million and £56.4 million.
It then issued a second profit warning last Tuesday, less than a week after the first one and on the day the tax bill was unveiled.
More than £300 million has been wiped off its share value as a result.