Your Space Plc announces CVA plan

Serviced offices provider Your Space PLC has announced that it has finalised the terms of a company voluntary arrangement (CVA) in a bid to secure the company’s long-term future.

The directors of the group, which includes Workspace (North West Limited) and Your Space (UK) Limited, have appointed Daniel Butters and Bill Dawson of business advisory firm Deloitte as joint Nominees.

Your Space PLC is listed on the Alternative Investment Market (“AIM”), and provides serviced office space across the UK, including Willenhall, in the West Midlands, Belfast, Glasgow, Liverpool, London, Manchester and Newcastle. The company also develops property, both for sale and its own use.

As a result of a downturn in activity and asset values in the property market, the business has faced challenges in securing increased occupancy rates to target levels, which has ultimately had an adverse impact on trading performance.

Following a number of attempts to restructure the business, the directors have identified that a CVA will be the most appropriate process through which a restructuring of the group can be achieved.

Chris Phillips, Your Space PLC non-executive chairman, said: “This announcement details the continuing steps we are taking to implement the strategy necessary to secure the group’s long term future. With the support of the Bank of Ireland and the company’s other secured creditors, the board is strongly of the view that the CVA proposal is in the best interests of the group and its stakeholders as a whole.”

Should the CVA proposals be approved by the creditors and members of the group, a dividend of approximately 20p in the pound will be repaid to the unsecured creditors, with the potential for up to a further 40p in the pound payable of the group meeting certain trading targets. If the group sell the properties it currently owns, and there is a surplus after the secured creditors are repaid, this will be paid to unsecured creditors.

The Bank of Ireland, the group’s secured lender, has confirmed its support for the CVA proposal. Her Majesty’s Revenue and Customs, the largest unsecured creditor across the group by value, has reviewed a draft of the CVA proposal and agreed to consider it favourably.  The group’s main landlord has also announced its support for the CVA.

To be approved, the CVA proposal needs the support of 75 per cent of the unsecured creditors and 50 per cent of the group’s members.

Daniel Butters, partner in the Reorganisation Services practice at Deloitte, said: “This CVA allows the business to remain as a going concern and to maintain its trade.  It offers job security to employees and certainty to its trading partners.

“The use of a CVA will result in a greater return to creditors compared to alternative insolvency procedures such as an administration or liquidation.  The growing use of CVAs demonstrates that in the appropriate situation administration can be avoided.”

The meeting of members and creditors to vote on the CVA proposal will take place on Monday 16 November.

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