Farewell Oddbins

So it is farewell to Oddbins – at least under the present ownership. The failure to gain agreement from HMRC to the Company Voluntary Agreement (CVA) proposal means the retailer will fall into administration at a court hearing on Monday. But it could rise from the ashes within a week.

Creditors at yesterday’s meeting to consider the CVA option, which Oddbins and its advisers, Deloitte, suggested could return 21 pence in the pound over 46 months, were bemused by HMRC’s intransigence.

Lee Manning of Deloitte, who is now likely to be the administrator, told the meeting that negotiations with the Revenue had been continuing for 10 days and it was only at 4pm on the eve of the meeting that HMRC announced that it would reject the plan. It even refused a request to allow the CVA meeting to be adjourned to allow time for further negotiations.

To gain approval, 75% of creditors would have had to accept the CVA plan and Manning told creditors that, apart from the Revenue, 84% would have done so. However, HMRC’s decision meant that 68% of creditors opposed the plan.

Why, asked other creditors, had HMRC pulled the plug at the last minute? Surely it had given outline consent to the plan and thus to the meeting being called – if it had always opposed the CVA there was no point in holding one.

Manning said it was his impression that HMRC felt that Oddbins would have been undercapitalised in its new, slimmed down guise despite an unnamed investor being willing to inject £1.25 million into the company once the CVA had been approved. So HMRC, which is owed more than £8m in the £20m Oddbins collapse, vetoed the scheme.

What happens now? Creditors at yesterday’s meeting were pessimistic about getting much, or any, of their money back. As one put it: “That’s £10m taken out of the wine trade”. 

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