XMPR is threatened by liquidation if creditors do not agree to reschedule the retail consultancy’s debts. The cashflow crisis has been forced by past debts “coming home to roost”, says managing director Rob Davie.
Ten jobs are on the line at the consultancy, which has already reduced in size from a previous average of around 15 employees. But Davie is upbeat about XMPR’s future, saying the major creditors appear supportive.
“We have fine-tuned every aspect of the business to ensure we survive and come out of this process,” says Davie.
XMPR will meet its creditors next week to seek approval of a Creditors Voluntary Arrangement (CVA), which will enable it to pay back debts over a three-year period, including a freeze on repayments for the first six months.
The CVA is a rescue procedure for firms in financial crisis, says Howard Morris, partner at law firm Denton Hall. “It’s a proper approach to a cashflow crunch, and 75 per cent of creditors have to approve the proposals,” he explains.
Davie says: “We decided on the CVA as we’ve had a couple of large creditors hanging over our head for months. We were repaying regularly but this was affecting our ability to trade on a month to month basis.”
While the approval of the CVA “cannot be taken for granted”, Davie says: “I have little reason to believe the creditors won’t approve. I genuinely don’t think we will go into receivership. Our whole plan is built on the confidence we have in the business having a more successful future.”