Patisserie Valerie had £10million of secret overdrafts

by XPRESS, 15 October 2018

Patisserie Valerie had overdraft facilities amounting to almost £10m of which the board had been unaware, Luke Johnson has revealed.

He told The Sunday Times that overdrafts had been set up with Barclays and HSBC, with £9.7m owed to the banks.

The news follows confirmation that Johnson has put up a £20m rescue package for Patisserie Valerie, consisting of a £10m loan and a further bridging loan of up to £10m, which was repaid after the business raised £15.7m through the issue of 30,000,000 new shares.

Johnson told the paper: “I’ve never had an experience like this in my career and I hope never to repeat it… It’s certainly been the most harrowing week of my life.”

He added: “There were 2,800 jobs at stake, there was 12 years of effort that I and colleagues had put into the business and the board were determined not to allow the business to go into administration.”

Johnson said that he was confident that the business was now fit to survive, though at a dramatically reduced valuation.

He said he would cut down his other commitments to be more close to Patisserie Valerie, adding: “We’ve got to rebuild, we’ve got to hire new talent, we’ve got to restore confidence in the business among suppliers and landlords, we’ve got to do better all round. There’s a lot of work to be done.”

Last week Patisserie Valerie suspended its shares and also suspended its finance director Chris Marsh having uncovered “significant, and potentially fraudulent, accounting irregularities”, including an unpaid £1.14m tax bill, and “a potential material mis-statement of the company’s accounts”.

Following the revelation Marsh was arrested by Hertfordshire Police and released on bail. The Serious Fraud office has also confirmed it that it has opened a criminal investigation.

On Saturday Patisserie Valerie tweeted: “It certainly hasn’t been a piece of cake this past week at Patisserie Holdings Plc but thanks to the dedication and hard work of our staff and directors we’ve made it through.

“We wanted to take this opportunity to thank you, our customers, [for] your dedication to our brand over the years and your kind words of support over the last week have kept us going.

“We can now look forward to a bright future full of cake!”

Article Credit: The Caterer