Why we Proposed a Company Voluntary Arrangement
Cogenpower approached Antony Batty & Company LLP for advice following significant financial difficulties due to changes in the eco-subsidies available in Italy and subsequent failed attempts to raise funding.
The Company had reached a point whereby it was no longer able to meet its financial obligations and was technically insolvent. A Company Voluntary Arrangement (“CVA”) proposal was prepared and put to creditors in September 2017. The CVA was approved by creditors without modification on the 24th October 2017, and two of our Licensed Insolvency Practitioners, Antony Batty and Hugh Jesseman were appointed Joint Supervisors.
The Value of Company Voluntary Arrangements in Restoring Solvency
The CVA had the effect of restoring the Company’s solvency and ring-fencing historic debts; this enabled the Company’s advisors, Peterhouse Corporate Finance Limited, to raise funding for the Company. The CVA proposed that a one-off contribution from the newly invested funds would be used to pay a small dividend to the CVA’s creditors, in full and final settlement of the Company’s debts. After just 3 months, the CVA was successfully completed.
The Company subsequently sold the Italian subsidiaries and has been renamed Monreal PLC. It has been relisted on AIM as a Rule 15 cash shell.
Cogenpower Were Delighted With the Outcome of the Company Voluntary Arrangement
Martin Groak, Cogenpower Plc’s chief finance officer said:
“Our company recently entered into a Company Voluntary Arrangement (CVA) with its creditors and instructed Antony Batty & Company to deal with the process on our behalf. When things do not go as planned in business, it is a time of great concern and nervousness for the directors, the business and, of course, the creditors. The calm, clear and reassuring guidance we received from Antony and his colleagues was invaluable.
Company Voluntary Arrangements are probably not a very well-known procedure, but our CVA allowed the company to restructure its debts with a minimum of fuss, making a clear break with the legacy debt burden and giving new investors the confidence that any money they put in would be put to use for the future of the business and not the problems of the past.
Antony’s team got us through the process – from shareholder and creditor approval to final agreed disbursements – in about 10 weeks, having previously taken control of the required Court documentation and communications with the creditors. Their fees were surprisingly modest and they were always available, helpful and supportive.”
Talk to us About Company Voluntary Arrangements
We have used Company Voluntary Arrangements to help over 50 companies that have encountered short term trading difficulties. As with this testimonial, the outcome was successful in over 70% of cases, with the companies returning to profitability and successful trading. We have particular expertise in the use of CVAs to restructure AIM listed businesses.
