Carpetright’s proposed company voluntary arrangement (CVA) has now been given the green light by its shareholders as it continues to report major losses.
In an announcement this morning, the embattled retailer revealed that both its shareholders and creditors had now voted in support of entering insolvency proceedings, following a creditor vote on Friday.
Despite both parties offering their support, the CVA will not get final approval until Carpetright secures £15 million of interim funding, with a market update expected later today. It will also need to have a successful equity capital raising, due to take place on May 18.
“The CVA proposal will enable us to take the tough but necessary actions needed to restore our profitability,” chief executive officer Wilf Walsh said.
“Having now received approval from both shareholders and creditors we will press ahead with our plans for the proposed equity financing to recapitalise the business and enable Carpetright to address the competitive threat from a position of strength.”
It added that it expects to see underlying pre-tax losses between £7 million and £9 million, attributing the drop to “continued weak consumer confidence, coupled with inevitable disruption to trade arising from the publicity”.
Like-for-like sales also fell 10.5 per cent in the final quarter of the year, dragging full year like-for-like’s down 3.6 per cent.