Countrywide Farmers has gone into administration. It appears that regulatory concerns delaying the sales of its retail operation to Mole Valley Farmers prompted Countrywide directors to call in the receiver.
The Evesham-based company agreed last October to sell its Retail operation to Mole Valley Farmers. It subsequently agreed to divest its LPG fuels division to DCC, the Dublin-based fuels to healthcare group for £28.75m in a deal that completed late in February. The earlier closure of Countrywide’s Amenity & Turf operation would have left the company with no trading assets, but a legacy of property assets to manage.
However, in late February, the Competition & Markets Authority’s initial review found competition concerns arising from a Mole Valley - Countrywide merger in 45 of the 48 local areas, and referred the deal to a more in-depth Phase 2 inquiry on March 6th.
At the time, Countrywide chief executive Julie Wirth commented: “The CMA has reviewed the competition aspects of this transaction and has found that there is a realistic prospect of substantial lessening of competition in relation to retail country stores and the supply of bulk agricultural products in a number of local areas.
“We disagree with the market analysis and believe it does not sufficiently take into account the broader competitive landscape within which our business operates. We will continue to work together with Mole Valley Farmers to determine undertakings which will satisfy CMA requirements and enable this transaction to progress, so securing the future for 48 stores and over 600 staff who work in and support them.”
But on Wednesday March 7th, David Pike, Mark Orton and Will Wright from KPMG’s Restructuring practice were appointed joint administrators to Countrywide Farmers plc. They are managing the 48 stores; the distribution center in Defford, Worcestershire; and the staff of 735. No initial redundancies have been made as a result of the administration.
The administrators say Countrywide had been exploring restructuring options over the past year since reporting a significant loss after IT disruptions to its retail division. But, “Following the recent CMA announcement, the proposed retail transaction cannot proceed”, advises KPMG partner and joint administrator Mr Pike. “Unfortunately, given the significant trading difficulties and cash flow pressures, this has led the directors to consider their options and take the difficult decision to place the company into administration.
“It is our intention to seek a purchaser for the business in whole or part and we have appointed Hilco Capital to assist in running the stores whilst we explore and develop available options. We encourage anyone who has an interest to contact us immediately.”
Enquiries should be made to Gareth Shaw on 0121 232 3288.