P&I seeks CVA to halt crisis

P&I Data Services has applied for a company voluntary arrangement (CVA) to overcome severe cash flow problems, after racking up trade debts of almost £1.7 million.

The move comes just a month after the Uxbridge reseller exited the PC hardware market and shed a third of its staff as part of a huge restructuring operation. It has since regrouped around its network and systems services arms.

According to a proposal lodged at the Slough County Court, P&I has trade debts of £1,679,471.02. IBM is owed a further £684,000, but as a secured creditor, will have ownership of P&I's sales ledger, worth £1,668,216, on 4 June. Unsecured creditors will receive a proposed 44.5p for every pound owed if the CVA is accepted, compared to nothing if the company went into liquidation or administration.

Joint owners Ian Summerfield, managing director, and Philip Burgess, finance director, will take on a 'more involved role on a day-to-day basis', according to the proposal.

Summerfield said he was confident the CVA would be accepted. 'For a CVA to work you need sufficient funds to move the business forward. You need to be profitable and you need the agreement of creditors. We have all three.

'We haven't prostituted ourselves to everyone in the market, so our creditors have supported us because they know we're not dealing with their competitors,' he added.

Nitin Joshi, director at chartered accountants Pannell Kerr Forster, which is representing a number of P&I's creditors, told PC Dealer: 'The creditors want P&I's cash flow to be tightly controlled and they want certain guarantees from the directors. They want to ensure that the CVA is sustainable and will bring in sufficient net profits and surplus monies.'

An industry source added: 'Some creditors are not happy with the company's culture and the directors' lifestyle. Key changes will be required for the CVA to work.'

P&I creditors will meet on 15 July, where 75 per cent of voting creditors need to approve the proposal for it to go ahead.

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