Sale of ScS's Sole Trading Subsidiary

    RNS Number : 2294Y
  ScS Upholstery PLC
  03 July 2008
   

    For immediate release                                                                                                             3 July
2008 

    ScS UPHOLSTERY PLC ("ScS" or the "Company")

    
Sale of ScS*s sole trading subsidiary to an affiliate of Sun European Partners, LLP for an undisclosed sum.  ScS Upholstery plc placed into
administration in order to effect this sale and application made for cancellation of listing.
    The board of directors of the Company (the "Board") announces that the Company has been placed into administration earlier today
pursuant to a Court order under the Insolvency Act 1986 and has sold its sole trading subsidiary, A. Share & Sons Limited (the "ScS
Business") to Parlour Product Holding Limited ("Parlour"), a wholly owned subsidiary of Parlour Product Holdings LLC and an affiliate of Sun
European Partners, LLP, the European adviser to Sun Capital Partners, Inc., a leading U.S. based private investment firm ("Sun").
    *     Total consideration is undisclosed but involves the provision of considerable working capital to enable the ScS Business to
continue to trade in the ordinary course of business and to pay its creditors as and when they fall due. 
    *     The transaction is expected to ensure the financial stability of the ScS Business and to enable it to continue its high level of
service to customers.
    *     Mark Firmin and Richard Fleming of KPMG LLP have been appointed as joint administrators (the "Administrators") of the Company.
    *     It is unlikely that the Company's shareholders will receive a dividend from the administration of the Company, and the prospect of
a dividend to the Company's unsecured creditors is uncertain.
    *     The Company has applied to have its listing on the official list of the UK Listing Authority cancelled with effect from 8.00 am on
Friday 4 July 2008.
    Mike Browne, Chairman of the Company, commented:
    "Given the difficulties created by the sudden withdrawal of credit insurance cover from suppliers to our retail sector, it became clear
that urgent steps needed to be taken to address our increased working capital requirements. Having considered all options open to us it was
apparent that a substantial, long term and immediate investment was required to secure the future of the ScS Business, without which the ScS
Business would have had to be placed into administration.  The sale of the ScS Business to Parlour is expected to provide this necessary
investment and to protect therefore the ScS Business's employees, trade creditors and customers, as well as helping to secure the future of
a number of its suppliers with workforces in the UK and continental Europe. The ScS Business looks forward to benefiting from the extensive
experience of Sun and its affiliates in the retail industry so that it can stabilise and grow its business."
    About Sun European Partners, LLP

    Sun European Partners, LLP, is the European adviser to Sun Capital Partners, Inc., a leading U.S.-based investment firm focused on
leveraged buyouts, equity, debt, and other investments in market-leading companies that can benefit from its in-house operating
professionals and experience. Sun Capital affiliates have invested in and managed more than 190 companies worldwide since Sun Capital's
inception in 1995 in the United States, with combined sales in excess of EUR27 billion (US $37 billion). Sun Capital has built up a strong
expertise in the retail sector with its current portfolio comprising 24 retail investments. For more information, please visit
www.SunEuropeanPartners.com. 
    Background
    
As noted in the interim management statement dated 14 May 2008, the Company's trading performance this financial year had been very
disappointing. This disappointing trading performance has continued. The Company's principal credit insurers withdrew cover for ScS, which
caused working capital difficulties for suppliers to the ScS Business and which in turn impacted on the Company's own working capital
position. In seeking to renew its overdraft facility, it became apparent that the Company's debt funder was unwilling to provide a renewed
facility.
    Following the confirmation that credit insurers had withdrawn cover, the ScS Business was faced with a significant cash requirement,
including a requirement to pay suppliers (for not only the outstanding amounts due to them but also for future deliveries) and a requirement
to meet rent payments for the Company's retail stores (and other leased properties). In view of the quantum of funding required and the
extremely short timescales available, the Board concluded that the more traditional routes of fund raising would either not be possible or
would not be sufficiently certain to be relied upon. 

As a consequence, the Company approached several different providers of capital, including funders of last resort which would consider such
an expedited injection of funding without recourse to extended due diligence.  Confidentiality agreements were entered into with several of
them and some commenced limited due diligence. However, it soon became apparent from that due diligence that the funding requirement was too
large for most of these potential funders. The Company decided that only one party (Parlour) was sufficiently interested (and had the
funding available) to achieve the desired continuation of the ScS Business.  For its part, Parlour confirmed that it was only prepared to
continue due diligence on the basis of a limited exclusivity period, which the Board felt compelled to agree to.  
    In its announcement on 23 June 2008, the Company stated that it had entered into exclusive discussions with an external party (which can
now be confirmed as having been Parlour) regarding the potential acquisition of the ScS Business.  
    
    Following due diligence by Parlour and the Board, it became clear that the appropriate method of effecting the sale to Parlour was for
the ScS Business to be acquired by Parlour following an administration of the Company. 
    Accordingly, Mark Firmin and Richard Fleming of KPMG LLP were appointed as joint administrators of the Company on 3 July 2008 and,
following discussions with Parlour, agreed the disposal of the sole trading subsidiary for an undisclosed sum. 

    Cancellation of shares
    Following the appointment of the Administrators, the Company has requested the UK Listing Authority to cancel the listing of its
ordinary shares of 1p each with effect from 8.00am on Friday 4 July 2008.
    Enquiries:
    David Knight                                        0191 514 6054
ScS Upholstery PLC
    Nicola Cronk                                        020 7466 5000
Buchanan Communications    
    Mark Firmin / Richard Fleming              0113 231 3000
KPMG LLP


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
MSCKXLBBVDBLBBQ
Scs Upholstery (LSE:SUY)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024