River Cottage Stores has filed a £1m loss, just 12 months before it is due to repay a Crowdcube bond for £993k.
We wrote a while ago about how River Cottage were struggling. One of their flagship restaurants, the Plymouth one, closed suddenly a few months ago and is now in liquidation. Of the various River companies we could find, none of them make anything other than delicious food - money is off the menu it appears.
When they raised the 5 year 7% bond on Crowdcube, plans were for another 3-5 units to be open by the summer of 2019 - the redemption date. So far they have opened none and lost one.
Continuing losses, putting River Cottage Stores in to a negative position of over £1m for YE March 2017, are not encouraging. 2016 promises of new equity funding for 2017 have failed to show so far. River Cottage Ltd, another Whittingstall starter, which is connected to the farm, owes over £600k which is due for repayment in a couple of months. Its accounts have been filed a with a massive typo giving them 434m issued shares instead of the correct 43m. HFW Interactive, which makes the Hugh Films, is also still loss making. The debt all the companies are swimming in is deadly deep.
The bond itself was set up under River Cottage Bonds plc, a non trading company (that still made a loss!) which loaned it to River Cottage Stores. River Cottage Bonds plc are now 3 months late filing their accounts and have already had a First Gazette posted and cancelled. UPDATE - the accounts for the plc have now been filed. Notes from the statutory auditors, include a warning that the plc relies on RC Stores for its working capital and that RC Stores is in the red to the tune £1m plus - which may be a concern!
As if all of this wasnt bad enough, it appears Ratty and his mates are jumping ship just as fast as they can.
Good luck to all you Bond holders. After all, you only live once.
Will be interesting to see if the guarantees on payment of bonds come good end of July on this one. The auditors PKF presumably got a written guarantee that this would be the case and the directors of course signed that it would be a going concern 12 months after signing the accounts so tick tock. Hope not the case here , but too many directors sign a guarantee to support the company for 12 months when they either do not intend to or do not have the financial ability to. Another area where Insolvency practitioners should go for the throat and bankcrupt those who make false statements and for the ICAEW to go after audit firms who swallow these statements without due validation
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