Yeovil company “has not appointed administrators”
Pittards, the leather goods company based in Yeovil is running short of funds. That is no secret. On 11 July it announced an open offer to shareholders to raise up to £1.85m. The funds were needed, the company said, to provide further working capital for the business.
Earlier on March this year the company placed 1,020,000 shares at 25p each raising £340,000 for working capital. However by July the share price had collapsed and the new placing was proposed at 4p per share. In the end investors had no appetite. By the close of the placing only £329,049 had been raised. Because the company had set a minimum level for the placing of £1.16m, the funds will be returned to shareholders who had subscribed.
On the 8 August the company announced that it was considering all of the strategic options available to it. The company said “due to the Group’s current financial uncertainty and in light of increased creditor pressure, following discussions with its advisors the board has regrettably resolved to file a notice of intention to appoint Ernst & Young LLP as administrators to the Company as soon as reasonably practicable.”
So most commentators, including the BBC initially reported that administrators had been appointed. Not an unreasonable assumption. However on 14 August the company issued a clarification. It noted : “Contrary to recent media reports the board wishes to clarify that it has not appointed administrators and Pittards continues to trade.”
In other words although the company clearly in tends to appoint administrators, it has not done so yet. Until it does so, the immediate fate pf the company remains in the hands of its directors.
That will change if and as and when administrators are formally appointed.