UK floorcoverings distributor Headlam has announced that, following the strategic review announced in July and subsequent updates, its board has resolved to file a notice of intention to appoint Will Wright, Chris Pole and Ryan Grant, all of Interpath, as joint administrators of the company.
The board says it has been pursuing a range of options to address the group's liquidity position, including refinancing, asset disposals and other strategic alternatives, and has worked hard over an extended period to explore and evaluate multiple potential solutions, resulting in the preparation of a comprehensive transformation plan: "Unfortunately, against a market backdrop that continues to be challenging, the board has been unable to execute on that plan in time.
"As a result, the company has now exhausted the liquidity available under its existing facility (which resulted in breaches to its month-end covenants), and ultimately the scale of the losses incurred, and projected in the short term, has made the challenge too great to overcome. Consequently, despite these extensive efforts and in the absence of other suitable alternatives, the board considers the proposed administration to be the only viable option."
The filing of the notice of intention to appoint administrators provides a period of protection for the group and its creditors while discussions remain ongoing with stakeholders. Unless circumstances change, and in accordance with statutory requirements, the board says it intends to appoint administrators within five business days.
A notice of intention to appoint administrators is also expected to be filed in respect of the company's subsidiary, HFD. The company's other subsidiaries are unaffected.
In light of the above, the company's listing of its ordinary shares on the Official List of the Financial Conduct Authority and the trading on the Main Market of London Stock Exchange have been suspended from trading.
