RNS Number : 9552C
Clinton Cards PLC
09 May 2012
9 May 2012 FOR IMMEDIATE RELEASE
CLINTON CARDS PLC
Proposed administration and suspension of dealings
Clinton Cards PLC ("Clinton Cards" or "the Company"), the UK's largest specialist retailer of cards, regrets to announce that it expects a subsidiary of American Greetings Corporation, ("American Greetings"), the Company's largest supplier, to take steps to place the Company and its subsidiaries into administration later today and has therefore requested a suspension of dealings in its shares with immediate effect.
Clinton Cards was informed last night that Barclays Bank plc and Royal Bank of Scotland plc (the "Banks"), had sold the Company's loan facilities to American Greetings. The outstanding indebtedness under such loan facilities is approximately £35m.
The Company is not in breach of any financial covenant or repayment obligation under the facilities. However, it had been in receipt of temporary waivers for some technical breaches of default related to management changes and supplier related discussions.
Whilst not party to the negotiations between the Banks and American Greetings, based on its discussions with American Greetings, the Board believed that, if the loan facilities were sold to American Greetings, American Greetings would enter into discussions with the Company with regard to its ongoing support for the business and expected it to extend the waiver of the technical breaches of the loan agreement.
However, having secured control of the debt, American Greetings immediately informed the Board that it intended to enforce the loan against the Company and the Board has concluded that because it is unable to repay the loan it has no option but to concur with American Greetings proposal to place the Company and its subsidiaries into administration.
Having completed the strategic review, the Board recognized the need to restructure the business and had been expecting to review its business plans and strategy with its stakeholders and exploring ways to produce a better outcome for the Company's stakeholders as a whole.
The Company had been intending to publish its interim management statement on 10 May. Trading for the 14 weeks of the second half to date has continued to be difficult, with Group like-for-like sales down by 3.5%, in line with the trend reported in the Interim Report and the Board's expectations.
Darcy Willson-Rymer, Chief Executive Officer Tel No: 020 8502 3711
Scott McLean Tel No: 020 7842 3260
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