Creditors support Doff Portland company voluntary arrangement

A bank and creditor-supported debt restructuring plan has been agreed for Doff Portland following the recent acquisition of Doff by 151 Products.

Doff, which manufactures garden care products, was bought by 151 Products in December 2012.

Discount household, DIY and garden goods manufacturer and supplier 151 says the family-owned business was saved from insolvency through an accelerated sale process and this subsequent restructuring.

The company added: "The situation arose due to a build-up of more than £6 million of debt – including £3 million owed to unsecured creditors – and a lack of available funds from the previous shareholders. As a result of this, the business had a net asset value of less than £1 million. "

151 Products says it made it clear to all creditors, including Doff’s bank, that its support for the company was conditional on obtaining stakeholder consent for a restructuring of these debts.

On 13 December, 2012, 151 Products obtained bank consent for the restructuring proposal that was then issued to creditors. 

A Company Voluntary Arrangement was approved by creditors on 8 January 2013.  151 and the new Doff board had 95 per cent trade creditor support for the restructuring.

151 says the result is that the business avoids insolvency, the unsecured creditors get a recovery against their existing debts, which they would not have otherwise received, and 151 Products can invest in the future growth of the business.

To ensure that Doff has had the ability to trade-on through the period during which support has been sought for this restructuring, 151 Products has provided Doff with trade finance facilities.  These allow Doff suppliers to trade with 151 Products, enabling them to get credit insurance on the goods supplied to the business.

151 says that given the "distressed nature" of Doff prior to 151’s acquisition, such insurance was not previously available to suppliers.

151 Products has also committed a facility of over £1 million to the Doff group, following agreement of the debt restructuring.  

Richard Shonn, managing director of 151 Products and a member of the Doff board, said: "We have reassured Doff’s customers that this restructuring process has not affected our ability to supply. 151’s offer of trade finance and additional investment in the company has maintained supplies to the business and we are operating on a business-as-usual basis."

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