Hunter leaves Conviviality
The CEO of UK drinks wholesaler Conviviality, Diana Hunter, is to step down from the board “with immediate effect”, following a difficult two weeks for the company.
In light of the recent reports around UK drinks wholesaler Conviviality, speculation was high that Hunter would be forced to leave the company at some point this week.
In a report run by Sky News at the weekend, it appears that the price of raising an emergency £100 million from its investors could be Hunter’s job and it seems this has been the case.
In a statement issued today, Conviviality said: “The Board of Conviviality announces that Diana Hunter, Chief Executive Officer of the Company, is stepping down from the Board of the Company with immediate effect. Ms Hunter will remain with the Company for a period of time in order to provide transition support. David Adams, non-executive Chairman of Conviviality, is today stepping into the role of Executive Chairman until further notice.”
After several years of rapid growth that has seen Conviviality acquire Bibendum and Matthew Clark and rise to the top of the UK drinks industry, it has been an abrupt and precipitous few weeks for the company, which first issued a profit warning earlier this month and then revealed it had also failed to account for a tax bill of £30m.
The announcements caused its share price to plummet and trading was suspended last Wednesday. According to The Times, the company’s market value fell from £567m to under £200m.
Sky added that the money is expected to be raised through the placing of new shares and although trading was suspended at 101p a share, the placing could be undertaken for as little as 10p, wiping out a huge amount of equity. The Times, however, has said the money may be raised through a rights issue.
Either way, Conviviality said in a recent statement it remains confident of raising the necessary funds and its customers and suppliers were continuing to be supportive.
One longstanding and major supplier of Conviviality told the drinks business it had “great faith in the business,” adding: “We are standing behind them very strongly and the vast majority of all suppliers are doing exactly the same.
“The business itself is extremely strong and will make a healthy profit this year. We for one are very confident they will continue to thrive and prosper.”
PricewaterhouseCoopers are looking into what caused the financial errors. If it is found that “human error” was behind it then the fundraising can go ahead but not if PwC discovers the problem is more systemic.