Company Voluntary Arrangements and Restructuring

Successful Restructuring for London AIM Listed Company Using a Company Voluntary Arrangement

We are pleased to announce the successful restructuring of Cogenpower PLC, a company listed on AIM in London, through the use of a Company Voluntary Arrangement. Cogenpower owned Italian subsidiaries which operated a low carbon energy business focused on the provision and development of combined heat and power district heating networks in towns and cities. This article details the key role that Company Voluntary Arrangements play in helping distressed companies return to profitability, and features a testimonial for our work.

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.

Interested in this Company Voluntary Arrangement Testimonial? Want to find out more?

If you or your business is facing insolvency, the sooner you contact us, the more we can help.

Contact us for a FREE Initial Consultation

Click here to see some more testimonials for the Company Voluntary Arrangements we have acted as supervisors on. For help and advice on CVAs, please contact our Licensed Insolvency Practitioners, in London, Essex, Salisbury or the Cotswolds, or call us on 0208 088 0633 for a FREE initial chat.

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