Newcastle-based David Price Food Services has secured a Company Voluntary Arrangement (CVA) that will see its unsecured creditors paid 38p in the pound on debts of about £2.1m.
The arrangement, which the firm said was approved by more than 99% of creditors at a meeting on Wednesday 5 September, safeguards the jobs of 175 staff across seven depots.
Company chairman David Price told MT he was relieved the firm had avoided falling into administration. “It has been a traumatic time for us. It’s not an ideal situation but we’ve done what we said we’d do. This now puts the company in a stable situation and leaves it structured for growth in the future,” he said.
Price added that he expects the company to return to profit in its new financial year (2012/13), after notching up pre-tax losses of £630,000 in 2010; £980,000 in 2011; and £154,000 (forecast) in the year ended 31 August 2012.
The firm’s directors have made a significant personal investment as part of the CVA, introducing £180,000 of additional working capital via a secured loan. “We wouldn’t be doing that if we didn’t have faith in the future,” Price said.