Tennent's NI owner set to repay £30m HMRC bill
C&C, the parent company of Tennent's NI, is set to repay the £30m tax bill that precipitated the downfall of Bargain Booze owner Conviviality after snapping up the failed company’s wholesale businesses.
The drinks manufacturing giant said on Wednesday that it had agreed to a repayment schedule with HM Revenue & Customs (HMRC) to cover the sum, as it begins to draw a line under some of the financial troubles that brought Conviviality down.
C&C said it is also planning to pay £102m to three of Conviviality’s banks — understood to be Barclays, HSBC and RBS — within the next 12 months.
The shock £30m tax bill was revealed in a market statement in March, having not been accounted for in Conviviality’s short term forecasts.
Conviviality had issued a fresh profit warning just days earlier, having found a “material error” in its outlook.
It was also suffering from softer margins in January and February, while cash levels were becoming increasingly stretched.
Conviviality subsequently failed to pay HMRC by the original deadline of March 29.
Its wholesale arm — which included brands Matthew Clark, Bibendum, Catalyst, Peppermint, Elastic and Walker & Wodehouse — was snapped up by C&C with support from AB InBev for a nominal sum.
The retail arm, which included Bargain Booze, Wine Rack, WS Retail and Select Convenience, was bought by food wholesaler Bestway in a £7m deal.
C&C detailed its repayment plan in its preliminary results, which explained it had also imposed cash controls on the acquired businesses. The company has hired AlixPartners to provide “detailed cash modelling” for the wholesale unit, and drafted in EY to conduct a full audit for the year to April 2018.