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Snoozebox Hldgs PLC (ZZZ)

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Wednesday 08 November, 2017

Snoozebox Hldgs PLC

Intention to Appoint Administrators

RNS Number : 9145V
Snoozebox Holdings PLC
08 November 2017
 

8 November 2017

Snoozebox Holdings plc

Business update, update on discussions with lender, intention to appoint administrators and suspension of trading on AIM

The Board of Snoozebox Holdings plc (the "Company") (AIM: ZZZ), the provider of rapidly deployed quality serviced accommodation, announces an update to the Company's business activities and an update on discussions with its lender.

Business update

The Directors have made significant progress toward improving the trading prospects and viability of the Company since adopting a new strategy in mid-2016.  Most recently, on 24 August 2017, the Company announced a significant contract win and the Directors believe the Company retains a good pipeline of potential new business for delivery going into 2018.  The Company has made good progress toward achieving operating cash flow breakeven, through a combination of revenue increases and cost reductions.

Update on discussions with lender

As previously announced, the Company has been in discussion with its primary lender, SQN Asset Finance Income Fund Limited ("SQN"), concerning its debt repayment obligations and the longer-term capital structure of the Company.  Achieving a successful outcome to these discussions has been fundamental to the continuance of the Company as a going concern for some time.

Despite constructive discussions and a number of proposals being made, it is now the Directors' view that the Company and SQN will be unable to agree a suitable debt servicing plan or longer-term capital structure for the Company and without SQN's support the Directors have concluded that the Company is unable to continue as a going concern.  The Company's main trading subsidiary Snoozebox Limited (the "Subsidiary") would, in the absence of support from SQN, be unable to pay its liabilities as they fall due.  The Company, by virtue of its guarantee of the Subsidiary's debt service obligations, would then in turn also be unable to pay its liabilities as they fall due.

Intention to appoint administrators

The Directors have concluded that in the circumstances it is in the best interests of stakeholders as a whole that the Company and Subsidiary be placed into administration.  Accordingly, the Directors intend to appoint administrators and expect such appointment to be made shortly, such appointment to be confirmed by a separate announcement at the respective time.  It is expected that the appointment of administrators would cause equity holders to receive little-to-nil value.

The significant debt burden taken on by the Company in 2014 has been one of the Company's largest challenges given the poor financial and operational position of the Company when the Directors commenced restructuring in early 2016.  It is a challenge that the Directors have sought to manage whilst aligning the Company to a new strategy and being as transparent as possible with shareholders.  However, the Company has succumbed to the challenge.  Given the significant progress the Company has made with delivery of its new strategy since mid-2016, this outcome is clearly very disappointing for shareholders.

Suspension of trading on AIM

Pending resolution of the Company's intention to appoint administrators and further clarification of its financial circumstances, the Company has applied for suspension of trading in the Company's ordinary shares on AIM with immediate effect.

 

The Company will make further announcements in due course.

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.

Enquiries:

Panmure Gordon

020 7886 2500

Corporate Finance:


Andrew Godber
Duncan Monteith






Corporate Broking:


Charles Leigh-Pemberton


 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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